Lack of Cash Isn't a Concern for These 3 Clinical-Stage Biotechs
May 3, 2017
By Mark Terry, BioSpace.com Breaking News Staff
It’s not news that investing in biotech companies can be a gamble—the odds are against compounds becoming marketed drugs. Cash burn is a big concern. Sean Williams, writing for The Motley Fool, looks at three clinical-stage biotech companies that have plenty of cash and are basically debt-free. In addition, the companies’ cash and cash equivalents make up at least 25 percent of their market caps.
1. Juno Therapeutics
Based in Seattle, Juno Therapeutics has two distinct and complementary platforms, Chimeric Antigen Receptors (CARs) and T Cell Receptors (TCRs). These are a type of immuno-oncology approaches. T-cells are harvested from cancer patients, then engineered to produce CARs. They are then grown in the lab and injected back into the patient. The engineered cells than attack and kill the cancer cells.
Juno’s approach is rather labor-intensive and has had some issues in clinical trials. In March 2017, it killed its JCAR015 program four months after a clinical trial was halted a second time after patient deaths. All five patients died from cerebral edemas. All had relapsed or refractory B cell acute lymphoblastic leukemia.
Juno has since shifted its focus toward JCAR017, a CD19-directed CAR-T cell product candidate for diffuse large B-cell lymphoma.
Williams writes, “Juno’s far from out in the battle to create new and innovative cancer drugs. The company currently has more than a half-dozen therapies in early stage clinical trials, most of which target various types of blood cancers. Juno’s $733 million in cash will clearly dwindle without any product revenue, but it’s reassuring to know it has the capital to run these studies without sweating a cash crunch in the near-term.”
Juno is currently trading for $25.23.
2. Agios Pharmaceuticals
Based in Cambridge, Mass., Agios Pharmaceuticals focuses on developing treatments for cancer and rare genetic diseases via cellular metabolism. On April 27, the company announced a global license deal with Aurigene Discovery Technologies to research, develop and commercialize small molecule inhibitors of an undisclosed cancer metabolism target.
The company’s lead target is the isocitrate dehydrogenase (IDH) pathway. Mutated enzymes in IDH1 and IDH2 have been identified in several tumor types and are believed to be involved in cancer cell proliferation.
Williams writes, “Biotech blue chip Celgene liked what it saw from Agios so much that it forged a collaboration with the company all the way back in 2010, and it’s only dug its heels in further since. The upfront cash received from these deals has been instrumental in allowing Agios to complete its clinical work.”
The company’s enasidenib for relapsed or refractory acute myeloid leukemia (AML) showed promise in a Phase I/II clinical trial, which if approved by the U.S. Food and Drug Administration (FDA), could make it standard of care. That would give it a shot at $1 billion or more in annual sales.
It also recently raised about $250 million in gross proceeds from selling 5.05 million shares of stock. Williams says, “This extra capital isn’t factored into the $541 million above, meaning more than 35 percent of Agios’ market value is comprised of cash and cash equivalents at the moment. This makes Agios an intriguing biotech stock worth watching.”
Agios is currently trading for $45.98.
3. Alder Biopharmaceuticals
Headquartered in Bothell, Wash., Alder Biopharmaceuticals ’ (ALDR) lead product, eptinezumab, is being evaluated for migraine prevention. Two other programs, ALD1910, is for migraine prevention, and clazakizumab, a monoclonal antibody that inhibits interleukin-6, is licensed to Vitaeris.
On April 28, Alder presented positive data from its Phase IIb trial of eptinezumab. Chronic migraine patients receiving a single infusion of eptinezumab had a significant reduction in migraine days.
Williams notes the company has $352 million in cash and has a $1.05 billion market cap. Eptinezumab looks promising, but there’s a fair amount of competition for migraine treatments these days, with Eli Lilly 's lasmiditan currently in a Phase III trial for migraine.
Alder is currently trading for $21.70.