Biotech stocks, especially those that don't have a medicine on the market yet, tend to be among the riskiest investments available. Even under the best of conditions, clinical trials can fail to pan out in the way that management had hoped, and regulators can sometimes pass down unexpectedly unfavorable rulings. 

The key is to invest in only the highest-quality businesses as second-rate players face even gloomier odds. So let's evaluate two early-stage biotech companies, one of which could be a good fit for the right niche in your portfolio, and one that you should probably avoid due to its even-higher-than-normal risk.

Beam Therapeutics (NASDAQ: BEAM) is a Cathie Wood favorite, and a cutting-edge biotech stock in the early chapters of its story.

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Source Fool.com