10 Biotech Stocks that Could Blow Up in Q3

10 Biotech Stocks That Could Blow Up in Q3 July 6, 2016
By Alex Keown, BioSpace.com Breaking News Staff

As investors look to the next quarter to bolster their returns through investments, James Brumley of Investor Place lays out the case for 10 biotech stocks he says could “erupt” within months.

Although biotech stocks have not been the most reliable this year, Brumley said the third quarter has typically been a good period for industry stocks to grow, gaining an average of 7.5 percent during typical third quarter cycles. Here’s his list of stocks:

1. Insys Therapeutics

The U.S. Food and Drug Administration just approved the Arizona-based company’s cannabis-based drug, Syndros. The drug, a dronabinol oral solution, was approved for use in treating anorexia associated with weight loss in patients with AIDS, as well as nausea and vomiting associated with cancer chemotherapy. Company stock jumped after Tuesday’s approval from $13.05 per share to $16.56 per share. The stock has dipped since Tuesday’s high and is now trading at $14.86 per share. The approval is good news for Insys as it has been defending allegations it falsified data in order to sell more of its painkiller, the fentanyl-based Subsys.

2. GW Pharmaceuticals

The company could see a spike in its price per share with the release of Phase II results of its GWP42004 type 2 diabetes treatment. Trial information of the cannabinoid treatment tetrahydrocannabivarin should be made available by the end of July, Brumley said. Shares of GW Pharmaceuticals are currently selling at $92.69 per share.

3. Valeant Pharmaceuticals

Canadian-based Valeant has seen its share of turmoil this past year, but Brumley believes its new chief executive officer Joe Papa and regulatory approval of its plaque psoriasis drug, brodalumab, which could come later this month, will be enough to kick-start the beleaguered company’s stock that has fallen more than 80 percent since August 2015. Shares of Valeant are currently trading at $20.84 per share.

4. Ultragenyx Pharmaceuticals

Shares of California-based Ultragenyx are up this morning, trading at $51.36 per share. Brumley anticipates the stock will get a boost from news regarding its Phase III trial of rhGUS as a treatment for Mucopolysaccharidosis 7.

5. Sage Therapeutics

Sometime this month Sage Therapeutics should announce results of its Phase II trial of postpartum depression drug candidate SAGE-547. Mid-trial results look positive and continued good news should send the stock upwards, particularly as postpartum depression impacts about 20 percent of women following childbirth. Shares of Sage Therapeutics are up this morning to $32.02.

6. Portola Pharmaceuticals

The little-known company could make a big jump in August when it expects to receive a ruling by the FDA on its factor Xa inhibitor, andexanet alfa. The therapy is being developed to control bleeding in patients with blood that doesn’t clot properly. Shares of Portola are trading at $23.78 this morning.

7. Achillion Pharmaceuticals

Shares of Achillion are up more than 4 percent this morning, trading at $8.22. During the third quarter, the company expects to announce data on its Phase IIa trial of a hepatitis C drug combination, a pairing of AL-335, odalasvir (ACH-3102), and simeprevir. Achillion is co-developing the treatment with Jansen, a subsidiary of Johnson & Johnson.

8. Alder Biopharmaceuticals

The third quarter could be telling for the company’s migraine treatment ALD403. Brumley noted that Alder ’s approach is different than many others because ALD403 is an antibody as opposed to a narcotic. Shares of Alder are trading at $25.76 this morning.

9. Novavax

Novavax is expected to provide an update on its RSV (respiratory syncytial virus) F vaccine during the third quarter, Brumley said. The drug has been fast-tracked by the FDA. If the treatment passes regulatory hurdles, the company anticipates the drug could become a blockbuster and generate up to $8 billion in annual revenue. Novavax is trading at $7.38 per share this morning.

10. Vertex Pharmaceuticals

Vertex is slated to release data on its Orkambi trial for cystic fibrosis during the third quarter. Although the drug is already in use for CF, Orkambi is now being tested for patients ages six to 11 whose disease has a special mutation. Vertex and Moderna also announced this week they will be teaming up to develop mRNA therapeutics for cystic fibrosis. Shares of Vertex are up nearly 4 percent this morning, trading at $89.82.

Back to news