June 3, 2016
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – It’s been a rough year for many biotech stocks, but now may be the time to snap up a few to add to your portfolio. Analysts at The Motley Fool picked three companies, Jazz Pharmaceuticals, Celgene and Ligand Pharmaceuticals, that are currently bargain-priced, but could make big gains.
Shares of Jazz Pharmaceuticals are down this morning, currently trading at $151.61 per share. Although that price may not seem like a bargain, Jazz posted strong earnings last year led by its close-to-being-a-blockbuster drug Xyrem, used to treat narcolepsy, which generated $955 million in sales. The company also saw strong revenue streams from its acute lymphoblastic leukemia chemotherapy drug Erwinaze, which generated $203 million in sales. Jazz also saw regulatory approval of Defitelio for hepatic veno-occlusive disease in March, which should also be a strong revenue driver.
Additionally, in May, Jazz snapped up New Jersey-based Celator Pharmaceuticals for about $1.5 billion. The deal brings Celator’s lead drug VYXEOS, an investigational treatment for acute myeloid leukemia and other blood cancers, into Jazz’ pipeline. Celator is looking to achieve regulatory approval in the U.S. and Europe for VYXEOS. Analysts at the Fool estimate VYXEOS could generate $1 billion in annual sales.
Shares of Ligand Pharmaceuticals are down this morning, currently trading at $117.65 per share. Unlike other biotech stocks, Ligand has actually been a strong performer over the past year, hitting a high of $130.37 in April. Shares could jump more due to Ligand having four drugs using its licensed technology awaiting regulatory approval, with another eight in late-stage clinical trials, the Fool reported. Ligand stands to have a strong 2016 and 2017 if these drugs are approved and more move closer to approval. Ligand is also likely to see a boost this year from its December 2015 acquisition of genetic-engineering company OMT, Inc. which has an antibody drug discovery platform. Ligand is projecting the addition of OMT to add 7 to 10 percent growth annually over the next 10 years.
Shares of Celgene Corporation are also down slightly this morning, currently trading at $107.17 per share. Celgene has seen the lion’s share of its revenue driven by its blood cancer drug Revlimid. The drug stands to gain regulatory approval for more uses, which would add to its revenue generating power. The company also has several other drugs that have the potential to become blockbusters, including cancer drug Abraxane and multiple myeloma drug Pomalyst, both of which generated more than $900 million in sales last year, the Fool noted. The anti-inflammatory pill Otezla, used to treat plaque psoriasis, is also projected to achieve blockbuster status, with sales of more than $2 billion. Celgene has the ability to grow organically, as well as through partnerships and acquisitions, such as its $1 billion stake in Juno Therapeutics .
