March 13, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Biotech stocks are notoriously volatile. That said, there are plenty of opportunities. Keith Speights, Sean Williams and Cory Renauer, writing for The Motley Fool, each picked a biotech stock that seems like a smart buy this month. Here’s what they chose.
Speights chose Spark Therapeutics , which has a submission for a Biologics License Application (BLA) for voretigene neparvovec (VN) in the works with potential approval by the end of this year. VN has shown a great deal of promise in a late-stage clinical trial in inherited retinal disease (IRD) caused by mutations in the RPE65 gene. In the study, 93 percent of patients with IRD gained functional vision over one year, and about 72 percent achieved maximum improvement in vision.
In addition, the company has SPK-7001 in a Phase I/II study for choroideremia, a rare genetic eye disease. Results are expected early this years. And it also has a pipeline drug in collaboration with Pfizer , SPK-9001, for hemophilia B, and SPK-8011, for hemophilia A. Early data is expected by the middle of the year.
Spark is currently trading for $57.82.
Picked by Sean Williams, Albany Molecular Research is a global contract research and manufacturing organization. On February 21, it announced it had inked an agreement with Ferrer and Accord Healthcare to jointly develop and manufacture a complex parenteral drug product with potential registration and commercialization in the U.S. They also have an option to partner on other drug products.
Williams notes that the company’s stock plunged at its fourth-quarter earnings report and 2017 outlook. “Its adjusted Q4 results included earnings of $0.34 per share and $191.3 million in sales, a 51% increase. However, Wall Street had been looking for $221 million in sales and $0.48 in Q4 EPS.” But Williams thinks now’s a good time to buy and that analysts didn’t factor in the company’s multiple 2016 acquisitions.
“Based on Albany Molecular’s high-single-digit organic growth rate and forward P/E of 12, the company appears to be fairly cheap. What’s more, as long as drugmakers retain their pricing power and the Trump administration has more on its plate than it can handle (pushing the prospect of drug price reform out even further), demand for drug service outsourcing is likely to remain strong.”
Albany Molecular Research is currently trading for $13.80.
Renauer picked Concert Pharmaceuticals . The company basically uses deuterium molecules to replace hydrogen molecules for known drugs to create longer-acting formulations. On March 6, it sold its cystic fibrosis (CF) drug candidate, CTP-656, to Vertex Pharmaceuticals for $160 million in cash up front. There are an additional $90 in milestone payments.
This was a plus for Vertex, whose Kalydeco brought in $703 million in 2016. They essentially bought a potential competitor. But Concert also has a deuterated version of Celgene ’s Otezla for psoriasis. Celgene has an option deal in place for that drug, CTP-730, which if it hit the trigger, would drop a bundle of milestone payments on Concert.
Renauer writes, “Concert’s stock popped roughly 75 percent when it announced the Vertex deal. With some big irons in the fire, this stock looks poised for some more big gains ahead.”
Concert Pharmaceuticals is currently trading for $16.61.
