4 Biotech Stars That Will Beat the Stock Slump
September 29, 2016
By Alex Keown, BioSpace.com Breaking News Staff
By Alex Keown NEW YORK – Although the iShares Nasdaq Biotechnology ERF is down 13 percent this year, analysts at The Street still see great promise in some of the biotech stars, including Amgen , Gilead Sciences , bluebird and Bellicum
Amgen
Shares of Amgen are currently trading at $168.36 as of 10:41 a.m. The stock took a tumble last week after its multiple myeloma drug Kyprolis in combination with chemotherapy failed to slow the regrowth of tumors better than rival cancer drug Velcade, a popular treatment produced by Takeda Pharmaceuticals and Johnson & Johnson . Amgen acquired Kyprolis in the acquisition of Onyx Pharmaceuticals . Brad Loncar, chief executive officer of Loncar Investments, told The Street Kyprolis generated $500 million in revenue last year.
“It’s not a total loss … it just failed in one particular setting,” Loncar said.
Additionally, Loncar said that Amgen investors are looking for Amgen to make another big M&A move, as the Onyx acquisition in 2013 was the last major one the company made. Investors could be happy that Amgen’s Amjevita, a biosimilar copy of AbbVie’s blockbuster RA drug Humira, was cleared by the U.S. Food and Drug Administration earlier this month. This week the company also acquired a large stake in California-based Arrowhead Pharmaceuticals to develop RNAi treatments for cardiovascular disease.
Gilead
When it comes to hepatitis treatments, Gilead has a secure toehold thanks to Sovaldi and Harvoni— two drugs that yielded $20 billion in revenue last year. Loncar though said investors know how that area is “mapped out” and are looking for the company to make a “transformative deal.” In February, Gilead’s Chief Executive John Miligan said he was eying some growth opportunities, particularly in the oncology, inflammatory diseases and liver disease fields.
Shares of Gilead have seen a steady decline over the past year, dropping from a high of $110.96 in October 2015 to the current price of $78.52 per share. The stock took a hit this month following a disappointing review of interim data from a Phase II/III clinical study of GS-5745, an investigational anti-MMP9 antibody. Still, the company is expected to announce the results from up to nine clinical trials between now and the end of the year. The trials involved five drugs used to target six different diseases—none of which are hepatitis C or HIV, two areas where Gilead has been highly successful. Areas the company is looking to provide therapies for include nonalcoholic steatohepatitis, primary sclerosing cholangitis, diabetic kidney disease, ventricular tachycardia and myelofibrosis.
Bluebird bio
Shares of bluebird bio are currently trading at $67.52, down from the opening price of $69. However, overall bluebird stock is up about 15 percent over the course of the year. The stock jumped this month after rumors Japanese pharmaceutical company Takeda was eying bluebird for a deal, Loncar said. Shares of bluebird took hits over the past year due to data over its beta-thalassemia gene therapy treatment. The company is waiting to release new data at the American Society of Hematology in December, which Loncar said should determine the course of the company’s stock prices.
This morning bluebird and Germany-based Medigene struck a collaborative deal to develop T cell receptor (TCR) immunotherapies against four targets that could be worth more than $1 billion.
Bellicum
Bellicum shares have climbed from a year-low of $7.71 in March to this morning’s price of $20.22 per share. Like bluebird, Bellicum is expected to make some changing announcements at the ASH conference in December, Loncar said. One of the things attracting investors is Bellicum’s proprietary Chemical Induction of Dimerization (CID) technology. The technology is designed to make T cell therapies safer. Juno is facing a class action lawsuit over its CAR-T therapy for patients with relapsed or refractory B cell acute lymphoblastic leukemia where three patients died during a mid-stage trial.