Organovo’s 3D Bioprinting May Be Sexy, But Agenus and Sorrento May Be Better Buys
March 2, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Although investors are intrigued by Organovo Holdings ’s 3D bioprinted human tissues, analysts are suggesting they take a look at a couple other biotech companies with a similar market cap that are working in a less volatile, but perhaps no-less revolutionary area. Specifically, The Motley Fool recommended taking a look at Agenus (AGEN) and Sorrento Therapeutics (SRNE).
Agenus
Lexington, Mass.-based Agenus is focused on the hot field of immuno-oncology, although its approach is slightly different than others in the field. The company has cancer vaccines called Prophage, currently in Phase II clinical trials. These vaccines use neo-epitopes, which are the specific part of the antigen that the immune system reacts to, designed for each patient’s unique cancer.
The company’s second approach is on checkpoint modulators, which are molecules produced by cancer cells to shut down the immune system, hiding from it. On Jan. 21, the company announced that the U.S. Food and Drug Administration (FDA) and given the go-ahead to the company’s investigational new drug (IND) application for AGEN1884. AGEN1884 is an immune checkpoint modulator antibody that binds to cytotoxic T-lymphocyte antigen-4 (CTLA-4). It also received clearance for a second checkpoint modulator, INCAGN1876, that it is developing with Incyte (INCY).
Agenus has been on a fairly steady slide for the last year. Shares traded on June 17, 2015 for $9.78, dropped to $4.58 on Sept. 28, but recovered slightly on Nov. 27 to $5.13. But shares dropped on Feb. 22, 2016 to $2.72. They have improved slightly, currently trading for $3.16.
“Bad news for longer-term Agenus shareholders could be good news for those looking to buy shares now,” writes Keith Speights for The Motley Fool. “Agenus’ stock has plunged more than 60 percent since last July. I think shares were overpriced prior to the broader biotech pullback, with a market cap of more than $750 million for a company that’s several years away from any meaningful revenue. Now, though, Agenus looks to have plenty of upward potential.”
Sorrento Therapeutics
San Diego-based Sorrento Therapeutics is also working on immunotherapeutics, although it seems to be doing stronger work in the area of biosimilars. The company has four biosimilars that have wrapped up late-stage clinical trials in China. Three are biosimilars to Erbitux, Remicade and Xolair. And, according to Speights, the company says its drugs are “biobetters,” because “the company thinks its products offer advantages to patients over the original drugs.”
For example, in a Phase III study, the company’s partner, MabTech, showed that its STI-001 had fewer side effects than for Erbitux.
Sorrento also announced today that, with Seoul, South Korea-based Yuhan Corporation (000100.KS; Yuhan), the two companies will start a joint venture, ImmuneOncia Therapeutics, LLC, to develop and commercialize several immune checkpoint antibodies against undisclosed targets in solid tumors and hematological cancers.
Yuhan will contribute $10 million to the new company, and Sorrento will give it an exclusive license for one of its immune checkpoint antibodies while retaining rights for U.S., European, and Japanese markets. It will also hold global rights to two more antibodies that will be selected by ImmuneOncia from Sorrento’s portfolio.
Sorrento also has several Phase I clinical trials currently ongoing for chimeric antigen receptor T-cell (CAR-T) therapies, and is conducting preclinical studies with two CAR-T therapies and CAR.TNK, chimeric antigen receptor tumor-attacking natural killer cells.
Speights points out that since July, Sorrento stock has dropped by more than 60 percent, but it might be a case of buy-low-sell-high, with the company showing promise.
As for San Diego-based Organovo, what has investors so curious is how revolutionary the technology is—or could be. It is using 3D printers to “print” living human tissues that function like native tissues. That’s science-fiction cool, but probably a long ways from being usable, given the amount of regulatory review something that new will require. At the moment, the company is pushing their products’ initial use as being for in vitro drug testing, toxicology and disease modeling, rather than the longer-range goal of using them for tissue and organ transplants.
Organovo is currently trading for $2.26 per share. Shares traded on June 11 for $5.70, dropped to $2.38 on Aug. 20, rose to $3.98 on September 18, and dropped to $1.73 on Jan. 19, 2016.
Pointing out that all three companies’ market caps are similar, Speights suggests that Agenus and Sorrento might have bigger bounces on good news because of their more dramatic recent drops. “Checkpoint modulators and biosimilars might not be quite as fascinating as 3D bioprinting,” he writes, “but the technologies could ultimately produce bigger winners for long-term investors.”