Daniel Cross, Kapitall: Biotech stocks are part of an industry that can be hard for investors to gauge, but here are three to consider. Many biotech companies spend years in development on a single product generating very little revenue, until it's finally released, which makes analyzing standard figures like price-to-earnings ratios highly misleading. Biotechnology has applications in every corner of the economy from drugs to improved food production to chemical and environmental protection. [Read more from Kapitall: New PM Excites Market for Australian Raw Materials] New drugs developed by a biotech firm must go through a lengthy three-stage approval process that can take between four and seven years. According to figures from the FDA, less than 1 in 10 drugs pass through every stage of the approval process to final implementation. This, coupled with large research and development costs, means a biotech company may spend an inordinate amount of time with negative earnings on a product that may not ever be approved for general use. This risk means it's extremely important to find companies working on multiple projects with a balance sheet that's capable of withstanding long periods of little or no revenue. Here are three such biotech companies. Click on the interactive chart below to see analyst ratings over time. All three have a positive operating margin, which means they have a relatively steady income stream versus their expenses. They also have current assets greater than three times in excess of current liabilities, giving them plenty of downside protection if a product has to be redesigned or the approval process takes longer than expected. Amgen (AMGN) is a familiar stock for most investors. This $84 billion dollar company is currently engaged in heart failure and cholesterol drugs. The new drug, labeled AMG 423 is wrapping up Phase 2 testing by the first quarter of 2014 and expected to enter Phase 3 afterward. Amgen recently acquired ONYX Pharmaceuticals for $10.4 billion. This gives the company a strong leg up in the cancer research market, predicted to be a $50 billion dollar industry by 2023, through ONYX's liver and kidney cancer drug Nexavar and a myeloma treatment drug called Kyprolis. The myeloma drug is currently only U.S.-approved, but is in Phase 3 trials for European markets – the results of which come in at the end of this year.