3 Rock-Bottom Biotechs That Big Market Players are Betting On

Published: May 17, 2017

3 Rock-Bottom Biotechs That Big Market Players are Betting On May 16, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Assumption: wealthy investors must know something about the stocks they successfully buy. There are certainly arguments opposing that statement, but let’s roll with it for today. Investorplace noted that Mark Lampert’s BVF Partners L.P., a San Francisco-based private investment partnership with about $1 billion to invest, had recently invested heavily in three biotech companies that otherwise appear to be on the rocks.

The thinking is that Lampert believes these rock-bottom stocks are in for a turnaround—buy low, sell high, after all. Let’s take a look.

1. BioLine RX

Based in Modi’in-Maccabim-Re’ut, Israel, BioLine RX is a clinical-stage biopharma company focused on oncology and immunology. On May 3, the company announced that it had met with the U.S. Food and Drug Administration (FDA) and got the go-ahead to start a Phase III pivotal trial for BL-8040, which the company describes as “its robust platform for multiple oncology indications, as a novel stem cell mobilization treatment for autologous bone-marrow transplantation.” The trial is expected to start in the second half of this year.

The company has partnership deals with Roche , Novartis , and Merck . Investorplace notes, “However, despite the support of the giants, the company is facing being delisted from the NASDAQ. Its shares trade for below $1.00, the minimum for a NASDAQ listing, due to a recent 34 million share offering that diluted price. BioLineRX has assured investors it will be back in compliance with the NASDAQ minimum by the July 24 deadline.”

BioLine RX are currently trading for $0.84.

2. OncoMed Pharmaceuticals

Based in Redwood City, Calif., OncoMed is a clinical-stage company focused on oncology. It currently has eight novel anti-cancer stem cell candidates in more than a dozen clinical trials. On May 8, at the same time it released its first-quarter financials, the company Bayer chose not to license two of the company’s drugs. Investorplace writes, “However, BVF, OncoMed’s second-largest shareholder, remains confident. OncoMed has started an intense cost-cutting program, which includes eliminating half of its employees for $60 million in savings over the next 24 months. Provided the savings are as high as expected, the company has enough cash to operate through the third quarter of 2019. This does not count any additional revenue generated by current and possible future partners.”

OncoMed are currently trading for $3.50.

3. Forward Pharma A/S

Headquartered in Copenhagen, Denmark, Forward Pharma is developing a proprietary formulation of dimethyl fumarate (DMF) to treat inflammatory and neurological indications, primarily multiple sclerosis (MS) and psoriasis. The biggest problem with Forward appears to beongoing litigation with Cambridge, Mass.-based Biogen (BIIB). In January, the company announced it had entered into a binding agreement with Biogen’s subsidiaries. Biogen was to pay Forward a non-refundable cash fee of $1.25 billion in connection to its license agreement, over patent issues related to DMF.

However, on March 31, Forward indicated it intended to file an appeal challenging another trial decision regarding DMF and Biogen’s Tecfidera. If the appeal goes through, Biogen would be obligated to pay Forward future royalties on Biogen products, including Tecfidera.

Investorplace writes, “Unlike the previous stocks on this list, shares are trading higher by over 7 percent this year and bucked 2016’s rout by advancing nearly 30 percent over the last 52 weeks. However, shares have recently given up approximately 35 percent at the end of March due to patent issues with Biogen, a competitor. Since the plunge, shares have built a solid technical base in the $19 per share-zone, setting up an ideal buy opportunity before the rebound.

Forward Pharma are currently trading for $19.88.

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