3 Promising Biotech Stocks for About $5 Bucks
October 26, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Sure, biotech stocks are taking a hit this year, but there are still great values out there. Bret Jensen, writing for Seeking Alpha, takes a look at three promising biotech stocks running about $5 a share.
1. Synergy Pharmaceuticals
New York-based Synergy Pharmaceuticals focuses on developing gastrointestinal (GI) drugs. On October 17, the company presented long-term safety data on plecanatide, its drug for chronic idiopathic constipation (CIC) and irritable bowel syndrome with constipation (IBS-C). The drug’s PDUFA date by the U.S. Food and Drug Administration (FDA) is January 29, 2017.
Jensen writes, “This is a significant market which a compound called Linzess dominates and is on the way to being a $1 billion dollar a year drug. Plecanatide in trials showed itself to be slightly faster acting than Linzess. More importantly, it causes less side effects, especially the incidents of diarrhea. It should rapidly garner market share if approved.”
Synergy is currently trading for $5.21.
2. Vascular Biogenics
Israel-based Vascular Biogenics has two proprietary technology platforms that utilize the body’s natural physiologic and genetic regulatory mechanisms. It has used the two platforms to develop programs in oncology and anti-inflammation. The oncology product candidate, VB-111, is a targeted anti-cancer gene-therapy compound to treat a broad range of solid tumors. Its anti-inflammatory product is VB-201, and focuses on modifying the body’s immune-mediated native inflammatory response.
The company has released positive Phase II trial data on VB-111 in ovarian cancer, with initial analysis results expected in the first half of next year. H.C. Wainright gave the company a “buy” rating in June with a price target of $11. Roth Capital gave it a “buy” rating with a price target of $17. And, also in June, Piper Jaffray indicated it expected the company stock to perform better than the industry sector.
Vascular Biogenics is currently trading for $5.
3. Merrimack Pharmaceuticals
Merrimack Pharmaceuticals , headquartered in Cambridge, Mass., calls itself a “fully integrated biopharmaceutical company that views cancer as a complex engineering challenge.”
In 2015, its first product, Onivyde (irinotecan liposome injection) was approved by the U.S. Food and Drug Administration (FDA). Last week it was approved for pancreatic cancer in Europe. Shire holds the European rights, but that will improve Merrimack’s royalty stream. In the second quarter of this year, Onivyde generated about $13 million in net revenue, a 30 percent increase year-over-year. It is being evaluated in a Phase II trial for front-line pancreatic cancer and a data readout is expected by the end of next year. The company will also begin a Phase III trial of the drug in small-cell lung cancer before the end of this year.
In addition, Merrimack had three other cancer drugs in mid-stage development.
Jensen writes, “This $5 stock looks ready to roll, especially after it addresses its funding overhang, which I expect it will do by the end of the year now. The company has enough cash on hand to fund development over the next year. In addition, its CEO recently left the company—rumor has it because he was resistant to any sort of buyout.”
Merrimack Pharmaceuticals is currently trading for $5.24.