3 High-Risk, Potentially High-Reward Biotech Stocks
August 10, 2016
By Mark Terry, BioSpace.com Breaking News Staff
It’s not completely clear if the U.S. presidential election is the sole reason behind the slide in biotech stocks, although some analysts clearly think so. The very public debate on drug pricing that was observed earlier in the year has mostly faded as the campaign continues. Nonetheless, biotech stocks have taken a hammering, but 24/7 Wall Street takes a look at three high-risk biotech stocks that have anywhere from a 90 to 500 percent upside for the aggressive investor.
Array BioPharma
Boulder, Colorado-based Array BioPharma is an oncology company that currently has six registration studies of three drugs, binimetinib (MEK162), encorafenib (LGX818) and selumetinib (partnered with AstraZeneca .
On Aug. 9., the company and AstraZeneca announced that its Phase III trial of selumetinib in combination with docetaxel in patients with KRAS mutation-positive locally-advanced or metastatic non-small cell lung cancer (NSCLC) did not meet its primary endpoint of progression-free survival (PFS).
Array Biopharma is currently trading down at $3.43.
It’s not clear if Lee Jackson, writing for 24/7 or the Stifel analysts’ report he cites came out before that bad news, but the analysts at Stifel apparently see positive things for the company. “We continue to like the implied risk/reward ahead of pivotal P3 COLUMBUS data later this quarter—and believe the company, despite being third-to-market with a MEK/BRAF inhibitor combo, still has an opportunity to differentiate binimetinib/encorafenib on the basis of safety/tolerability.”
They also remain “cautiously optimistic” about the company’s progress forward in NRAS melanoma.
Take yesterday’s bad news into account when evaluating this company.
GlycoMimetics
GlycoMimetics , based in Rockville, Maryland, is a clinical-stage biotech company that uses glycobiology to develop treatments for various diseases. In late June, it announced it had dosed its first patient in a Phase II clinical trial of GMI-1271 in patients with newly diagnosed acute myeloid leukemia (AML). The company has earlier received Fast Track designation for the drug from the U.S. Food and Drug Administration (FDA) to treat adult patients with relapsed or refractory AML and elderly patients aged 60 or older with AML.
The company also has rivipansel in Phase III trials to treat vaso-occlusive crisis, which is associated with sickle cell disease, and GMI-1359, which is being prepped for clinical development. It also has a research and development deal with Pfizer .
GlycoMimetics is currently trading for $8.04. Analysts with Stifel give the stock a price target of $15. A consensus target is $13.50.
Esperion Therapeutics
Ann Arbor, Michigan-based Esperion Therapeutics focuses on developing and commercializing drugs to treat low-density lipoprotein cholesterol (LDL-C). Last week the company provided an update on its bempedoic acid (ETC-1002) development program. Its Investigational New Drug Application (IND) with the FDA for a fixed-dose combination of bempedoic acid and ezetimibe had been accepted in June. It also started a Phase I bioavailability study. It expects to announce top-line results from the Phase I and Phase II trials of bempedoic acid and high-dose statins in September, and in the fourth quarter of this year expects to start a Phase III trial.
Esperion Therapeutics is currently trading for $10.64.
24/7 Wall Street indicates Esperion has been a rumored takeover target for a while. Stifel gives it a price target of $64, which is dramatically higher than the consensus target of $24.21. The Stifel analysts wrote, “The company has two ongoing studies of ETC-1002 plus statin therapy with top-line results expected during September. One trial is studying incremental LDL-lowering on top of high dose statin therapy as well as PK and PD. The other trial is studying ETC-1002 with four commonly prescribed statins to study drug-drug interaction, safety/tolerability, and PK. The resulting data from the two upcoming trials studying ETC-1002 with statin therapy are potentially an important de-risking event for the stock.”
Lee Jackson cautions, however. “These are extremely aggressive and potentially volatile stocks and trades. They are only suitable for speculative accounts with a very high risk tolerance. With that caveat in mind, some big gains could be there for biotech traders.”