2 Biotechs That Turned $7,000 Into $130,200 for Investors

Published: Oct 02, 2017

2 Biotechs That Turned $7,000 Into $130,200 for Investors September 29, 2017
By Mark Terry, BioSpace.com Breaking News Staff

There’s very little argument that the point of investing is to turn a relatively small amount of money into a hopefully large amount of money. Which is why Rich Duprey, writing for The Motley Fool, takes a look at two biotech companies where a minimum investment of $7,000 would have become a return of $130,200 or more today.

1. Regeneron Pharmaceuticals

Headquartered in Tarrytown, NY, this 30-year-old company has six drugs approved by the U.S. Food and Drug Administration (FDA) and has a pipeline for a range of diseases, including cancer, asthma, pain and infectious diseases. Its strongest drug is Eylea, for wet age-related macular degeneration, which brings in around $3.3 billion in annual sales, which accounts for most of its $5 billion in annual revenue. It also has Arcalyst for a rare inflammatory disease, Praluent for cholesterol, Kevzara for moderate to severe active rheumatoid arthritis, and Zaltrap for metastatic colorectal cancer.

On Sept. 11, Regeneron Pharmaceuticals and Paris-based Sanofi announced positive Phase III data for Dupixent (dupilumab) for asthma. Many analysts believe it will eventually be a blockbuster drug.

Duprey writes, “It’s always difficult to know when a biotech will hit pay dirt, but for the investor smart enough (or lucky enough) to buy in to Regeneron just before Arcalyst was approved, a $7,000 investment would have turned into $143,400. While some of these treatments have only recently been approved, and its agreements with some partners has it recording sales but both companies splitting the profits, Regeneron looks like it has found the path to successful drug approval. Given its current pipeline of more therapies under development, look for it to hit pay dirt again in the future.”

Regeneron is currently trading for $440.31.

2. Incyte

Headquartered in Wilmington, Del., Incyte is an oncology company, one that is the topic of constant speculation as an acquisition target. Its first approved drug was Jakafi, and is projected to hit $2 billion annually. Potential buyers cited are Gilead , Eli Lilly & Co. and Novartis . When investors tire of speculating on who might buy Incyte, they switch over to who Incyte might buy. In 2016, it bought ARIAD Pharmaceuticals ’ European operations and an exclusive license for Iclusig for leukemia.

All eyes are currently on its epacadostat for lung cancer and other indications, which if approved, is expected to hit sales of $1.7 billion by 2022. And on Sept. 14, Incyte with Eli Lilly announced positive data from a Phase II trial of baricitinib in moderate-to-severe atopic dermatitis (AD). In a combination with a mid-potency topical corticosteroid, the drugs showed improvements in AD compared to the corticosteroids alone.

Duprey writes, “Investors who patiently waited for Incyte to succeed were well rewarded, as a $7,000 investment in 2007 is today worth $130,200. Whether it can replicate that success remains to be seen. Although it and partner Eli Lilly seem to be on an expedited course to address FDA concerns about their rheumatoid arthritis treatment baricitinib, there may be competition to Incyte’s primary revenue driver, Jakafi, coming soon, so the biotech has some risks surrounding it that might make its stellar track record hard to repeat.”

Incyte is currently trading for $114.61.

Back to news