3 Intriguing Small-Cap Biotechs to Put on Your Watchlist

Published: Apr 21, 2017

3 Intriguing Small-Cap Biotechs to Put on Your Watchlist April 20, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Not everybody is interested in small-cap companies, but they can be affordable entries and in some cases, they’re ready to take off. Alessandra Scibetta, writing for Seeking Alpha, takes a look at three small-cap biotech companies she thinks are worth watching.

1. Bellicum Pharmaceuticals

Based in Houston, Texas, Bellicum Pharmaceuticals focuses on immunotherapies for hematological cancers and solid tumors, as well as orphan inherited blood diseases. Its lead program, BPX-501, is an adjunct T-cell therapeutic for children with leukemias, lymphomas and genetic blood diseases undergoing T-depleted, haploidentical hematopoietic stem cell transplantation (HSCT). The company just closed on its initial public offering (IPO) on March 29, 2017.

BPX-501 has received Orphan Drug designation by both the European commission and the U.S. Food and Drug Administration (FDA). It is currently in Phase I/II clinical trials.

It also has BPX-601 for solid tumors, currently in Phase I. It targets PSCA antigen, found in prostate, pancreatic, bladder, esophagus, gastric and other cancers. PBX-701 has just started a Phase I trial and focuses mainly on melanoma.

Scibetta writes, “Bellicum could become a game changer because its switching mechanisms offer better control over the safety of these procedures and its technology is considered the leader among its peers. The downside is that the company has a very high burn rate and will soon lack liquidity to expand its clinical activities and properly commercialize its discoveries.”

Bellicum is currently trading for $13.87.

2. Sucampo Pharmaceuticals

Headquartered in Rockville, Md., Sucampo Pharmaceuticals focuses on drugs for gastroenterology, oncology and ophthalmology diseases. On April 3, the company acquired Vtesse, a private company focuses on rare diseases, for $200 million. Along with the company, it acquired VTS-270, which is currently in a pivotal trial for Niemann-Pick Disease Type C1 (NPC-1). Results are expected in mid-2018. Its pipeline is focused on prostones, metabolites of prostaglandins. One product on the market is Amitiza, which is used to treat chronic constipation.

Scibetta writes, “The recent acquisition of Vtesse gives the company access to the orphan drug VTS-270 that, if Phase III trials succeed in 2018, could reach the market already in 2019. Its main product Amitiza is bringing safe liquidity to the company and its pipeline is growing with new products. It has a sound business model with partnerships helping covering part of R&D costs and giving back royalties, thus reducing uncertainty risks. It should be strongly pointed out, however, that a great part of this company’s revenues are still based on Amitiza only.”

Sucampo is currently trading for $9.62.

3. Cytokinetics

Based in South San Francisco, Cytokinetics focuses on developing therapeutics for diseases related to muscle function, such as amyotrophic lateral sclerosis (ALS), heart failure, spinal muscular atrophy (SMA) and chronic pulmonary disease (COPD). It has a number of compounds in its pipeline, with Tirasemtiv for ALS in Phase III. It has partnerships in place with Astellas and Amgen .

On March 29, the company announced the second cohort of its Phase II trial of CK-2127107 in patients with SMA was open for enrollment. SMA is a severe neuromuscular disease that occurs in about 1 in every 6,000 to 10,000 live births annually. It is noted with varying degrees of severity of progressive muscle weakness that leads to problems in breathing and mobility.

Scibetta writes, “The company has two leading and very exciting products, Tirasemtiv and Omecamtiv Mercarbil, which have both the potential to become big hits. The first is an orphan drug for ALS (let’s not forget that the only other approved drug for ALS goes back to 1995) which has shown brilliant results in slowing the progression of the disease and improving patients’ life conditions. The second treats heart failure and is considered one of the most exciting new products in the field.”

Cytokinetics is currently trading for $13.38.

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