A look at six biopharma companies that may have major stock catalysts this year.
Not only is the biopharma market expected to be a hot one for mergers and acquisitions this year, but it’s expected to be hot for stocks as well. It’s been big for M&A already, with Celgene acquiring Juno Therapeutics, and Sanofi acquiring Bioverativ and Ablynx. 24/7 Wall Street looks at six biopharma companies that may have major stock catalysts this year.
Headquartered in Palo Alto, California, Eiger focuses on orphan diseases. On Jan. 16, the company announced disappointing results from its Phase II LIBERTY trial for ubenimex in pulmonary arterial hypertension (PAH). As a result, it is discontinuing development in PAH.
That hardly sounds promising, but 24/7 Wall Street notes, “What matters now is that Eiger is not out of the game as it has four drug candidates in Phase II studies: two targeting hepatitis delta, one targeting post-bariatric hypoglycemia and one targeting lymphedema.”
Based in Burlington, Mass., Flexion focuses on non-opioid pain treatments. Its Zilretta was approved by the U.S. Food and Drug Administration (FDA) for osteoarthritis of the knee in October 2017.
24/7 Wall Street writes, “The company recently showed that 95 percent of patients achieved clinical benefit after a single administration of Zilretta. Another driving force is the potential for Flexion to be acquired. In fact, the company has been directly mentioned as a rumored biotech takeover target, and it was said to have received an offer in the ‘mid $30s’ from Sanofi in early 2017 when its stock was lower.”
3. La Jolla Pharmaceutical Company
Located in San Diego, La Jolla Pharmaceutical’s Giapreza was approved by the FDA in December 2017 to increase blood pressure in adults with septic or other distributive shock. The company’s market cap is slightly over $800 million.
“The big driver for La Jolla was highlighted by a 15 percent jump in its shares in December after the FDA approved its Giapreza as a new drug to increase blood pressure for patients who have low blood pressure,” 24/7 Wall Street writes. “The company is training its own sales team and is expected to begin selling the drug early in 2018. Its target market may be hundreds of thousands of patients. Analysts are calling for the non-revenue company to reach $30 million or so in 2018 sales, but the potentiality for this drug alone could quite easily be exponentially higher.”
Headquartered in Houston, Texas, PLx Pharma uses its PLxGuard delivery system to improve on aspirin products. Its lead product is Aspertec, a reformulation of aspirin with a lower risk of acute gastrointestinal side effects that still provides anti-blood-clotting activity. The company expects to launch Aspertec in 2019.
24/7 Wall Street writes, “This is an alternative to enteric-coated aspirin that is used by about 90 percent of patients. Janney recently initiated coverage with an Outperform rating and a $14 fair value for PLx.”
Janney wrote in a research report, “After establishing Aspertec as the brand of choice among such specialists in the first few years of launch, PLx plans to implement a direct-to-consumer ad campaign to make the 50 million people taking aspirin aware of Aspertec. … We have confidence sales of Aspertec can reach $100-$200 million and may peak well in excess of $300 million.”
5. Ra Pharmaceuticals
Based in Cambridge, Mass., Ra Pharmaceuticals is working on diseases caused by over-activation of the complement system, which is part of the immune system. On Jan. 8, it initiated dosing in its Phase Ib clinical trial of RA101495 SC in patients with renal impairment. The drug has potential for treatment for atypical hemolytic uremic disorders (aHUS) and lupus nephritis (LN).
The company also has a collaboration with Merck, as well as other programs. 24/7 writes, “These include Factor D administered as an intravitreal injection for dry age-related macular degeneration and Factor D administered SC for C3 Glomerulonephritis and dense deposit disease. The company is also studying C1s inhibitors to potentially have a broad utility in a number of disease areas.”
Located in Cambridge, Mass., Syros focuses on targeted drug discovery based on control of gene expression and regulation. On Jan. 8, the company announced a collaboration deal with Incyte Corporation. Syros will use its gene control platform to identify therapeutic targets focused on myeloproliferative neoplasms (MPNs) and Incyte will have the option to obtain exclusive worldwide rights to intellectual property that comes out of the collaboration for up to seven validated targets. Incyte paid Syros $10 million up front and acquired $10 million in Syros common stock at $12.61 per share. Syros is eligible for up to $54 million in target selection and option exercise fees, and up to $50 million in development and regulatory milestones, and up to $65 million in commercial milestones, as well as low single-digit royalties.
Syros also has a clinical supply agreement with Johnson & Johnson’s Janssen Research Development.
