Although the overall stock market has been a bit jittery as the result of a trade war, biotech stocks have been surprisingly steady—at least in comparison to their usual volatility.
Although the overall stock market has been a bit jittery as the result of a trade war, biotech stocks have been surprisingly steady—at least in comparison to their usual volatility. The Nasdaq Biotechnology ETF, called the IBB, is up about 17 percent so far this year. Keeping in mind that biotech stocks are notoriously volatile, here are three biotech stocks that Cory Renauer, writing for The Motley Fool, thinks can double in the short term.
Galectin Therapeutics. Headquartered in Norcross, Georgia, Galectin focuses on using its carbohydrate technology target galectin proteins to develop drugs, particularly in the areas of inflammatory, fibrotic, and malignant diseases. That puts their focus squarely on non-alcoholic steatohepatitis (NASH), which is similar to cirrhosis of the liver, but in people who drink little to no alcohol. It is at least partly related to the obesity and diabetes epidemic. There are no approved treatments for NASH except for lifestyle changes. It’s a potential $25 billion market by 2026 and quite a few companies are focusing on it, including Allergan, AstraZeneca, Takeda Pharmaceutical and Gilead Sciences.
In a mid-stage clinical trial, Galectin’s GR-MD-02 reduced the throat blisters patients often develop with cirrhosis caused by NASH. In the 107 patients receiving the drug in the trial, only one developed the esophageal blisters that are caused by venous pressure that results from damage to the liver. Renauer notes, “Unfortunately, Galectin set out to prove its candidates could reduce patients’ hepatic venous pressure gradient (HVPG). Investigators measured an HVPG difference, but it wasn’t strong enough to be considered statistically significant.”
They reconfigured the trial—generally not viewed as a good thing—to look at patients with NASH but no throat blisters, called esophageal varices. If the company’s Phase III program has any success at all—despite the oddities of the Phase II trial—particularly given the positive aspects of the Phase II trial, Renauer thinks the possibility of doubling your investment is high.
Geron Corporation. Based in Menlo Park, California, Geron focuses on developing imetelstat, a telomerase inhibitor, in hematologic myeloid malignancies. Imetelstat is currently in two clinical trials, IMbark, a Phase II trial in myelofibrosis, and IMerge, a Phase II/III trial in myelodysplastic syndrome. The trials are being conducted by Janssen Biotech, a Johnson & Johnson (J&J) company, under an exclusive worldwide collaboration and license agreement.
In mid-June, the company presented mid-stage data at the 23rd Congress of the European Hematology Association (EHA) held in Stockholm, Sweden, which was encouraging. Eleven out of 32 patients, or 34 percent, had a greater than or equal to 8-week TI, (transfusion independent), with a median duration of 23.1 weeks. Based on the data, Part 1 of IMerge was expanded and another 25 patients naïve to lenalidomide and HMA treatment who are non-del(5q) were enrolled.
Part of the focus for investors is on whether J&J will pick up the drug. Renauer writes, “Investors willing to accept a great deal of risk could see this stock double if stellar top-line results from the IMbark trial convince J&J to pick up the tab for larger, more expensive, pivotal studies. Using a cut-off date in April, investigators are checking for an overall survival among myelofibrosis patients treated with imetelstat. If they find one, a lucrative deal with the world’s largest healthcare company seems imminent.”
Progenics Pharmaceuticals. Located in New York City, Progenics’ pipeline includes drugs that precisely target cancer (Azedra, 1095, and PSMA TTC), PSMA-targeted imaging agents for prostate cancer (1404 and PyL), and imaging analysis technology. It has a commercial product, Relistor, for opioid-induced constipation, for which it is partnered with Valeant Pharmaceuticals.
On June 26, the company completed enrollment in its Phase II/III OSPREY clinical trial evaluating the diagnostic accuracy of its PSMA-targeted PET/CT imaging agent, PyL, in prostate cancer. The trial enrolled 266 patients with localized high-risk prostate cancer and 117 patients with recurrent or metastatic disease. The co-primary endpoints are the assessment of sensitivity and specificity of the PyL PET/CT imaging to detect prostate cancer in regional lymph nodes in patients about to undergo radical prostatectomy.
On a much closer front, the U.S. Food and Drug Administration (FDA) will soon be making a decision (in July) on the company’s Azedra to treat two rare types of cancer that affect the adrenal glands, pheochromocytoma and paraganglioma. If approved, the company’s $558 million market cap could double.
