April 11, 2016
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – It’s been a tough 2016 for biotech stocks, which means that for some investors, now is the time to pick up some stocks that have become devalued.
So far this year, the S&P 500 Biotech Index is down about 20 percent and the Nasdaq Biotechnology Index is down more than 26 percent since the beginning of the year. Keith Speights of The Motley Fool picked three biotech stocks that have “been beaten down,” but have great potential for investors. The stocks are:
Since the beginning of January, San Rafael, Calif.-based BioMarin ’s stock has struggled, falling from $93.29 per share to a low of $67.74 in February. Since the low, the stock has climbed back to its current value of $84.21 per share. Part of the company’s woes are linked to the U.S. Food and Drug Administration (FDA)’s rejection of BioMarin’s application for Kyndrisa (drisapersen), for the treatment of Duchenne muscular dystrophy. The FDA determined that there just wasn’t enough proof of the drug’s efficacy. The company also faced concerns from some investors as its phenylketonuria drug pegvaliase, developed to treat the buildup of the amino acid phenylalanine in patients, received mixed results in a trial. However, the company was able to breathe a sigh of relief when its late-stage treatment for Batten disease met its goal. Also, Speights said BioMarin’s enzyme replacement therapy for rare genetic disease Morquio A syndrome, Vimizim, has seen sales triple over the past year.
Shares of Santa Monica-based Kite Pharma have seen ups and downs over the first three months of 2016, in part due to safety concerns over its CAR-T therapies. But, the company has four clinical trials underway and the results could send the stock soaring. If results are promising, particularly for lead study of KTE-C19 for the treatment of refractory, aggressive non-Hodgkin lymphoma, Kite could see a big next few years. Analysts are predicting sales of $1.7 billion for KTE-C19 if the drug is approved. KTE-C19 is designed to genetically modify a patient’s T cells to express a Chimeric Antigen Receptor (CAR) designed to target the antigen CD19, a protein expressed on the cell surface of B-cell lymphomas and leukemias. KTE-C19 has had some negative press after the death of a patient, but Kite said it was determined the experimental medication had no role in the death of a patient with a low prognosis. Kite could also benefit from several immuno-oncology deals it struck, including one with Amgen and one with Seattle-based Alpine Immune Sciences, Inc.
Shares of Anacor Pharmaceuticals has lost about half of its market cap since the beginning of 2016. Stock prices have fallen from $97.05 in January to a low of $53.45 at the end of March. The stock has shown signs of rebounding, as it is currently trading at $66.68 per share. Part of the reasons for the company’s stock failure is related to the overall decline in biotech stocks since the beginning of the year, as well as disappointing sales of its toenail fungus therapy, Kerydin, which is the company’s only approved product. However, Anacor could be turning around, as the FDA accepted the company’s New Drug Application for crisaborole, a non-steroidal topical anti-inflammatory phosphodiesterase-4 (PDE-4) inhibitor for the potential treatment of mild-to-moderate atopic dermatitis in children and adults. The FDA is expected to make a ruling on Jan. 7, 2017, which could start the company off on a banner year. If approved, analysts said crisaborole could generate peak annual sales of over $1 billion, Speights said.
