In a Volatile Biotech Market, Here are 3 Stocks To Consider

In a Volatile Biotech Market, Here are 3 Stocks to Consider
April 12, 2016
By Mark Terry, BioSpace.com Breaking News Staff

While Cambridge, Mass.-based Biogen confuses investors with rumors of sales of its hemophilia assets, and the Pfizer -Allergan deal falling apart blew up everyone’s expectations, The Motley Fool discusses three biotech companies that might be worth investing in.

Biotech stocks are, in general, having a tough year. The NASDAQ Biotechnology ETF is down by 18 percent so far this year. That volatility is giving investors second thoughts about biotech stocks, but there are a few out there that are either steady performers or are showing positive signs of a climb.

Regeneron Pharmaceuticals

Brian Feroldi, with The Motley Fool, likes Tarrytown, NY-based Regeneron Pharmaceuticals . Company have been all over the place, with a high of $592.40 on Aug. 4 and a low of $359.68 on Mar. 30, 2016. It is currently trading for $395.09. The company’s fourth-quarter sales in the U.S. of its eye medication Eylea didn’t meet the company’s projections. A bigger problem is that it lost a lawsuit to Amgen , which could force them to take its cholesterol drug, Praluent, off the market. A more likely outcome is Regeneron and Sanofi will pay Amgen royalties, but that’s not likely to make investors happy either.

Feroldi notes that Eylea is still doing very well and is expected to grow a possible 20 percent this year, with even bigger sales outside the U.S. Perhaps bigger news on the positive side is excellent data was announced for dupilumab for eczema, which will be submitted for regulatory approval by the end of the year. Also the company’s sarilumab, for rheumatoid arthritis, is already being evaluated by regulators. Feroldi says, “Regeneron could potentially have four blockbuster drugs on the market by the end of 2017.”

Gilead Sciences

Gilead Sciences is such a solid performer that it’s almost a blue-chip stock. In the last 15 years, the company’s gained more than 4,930 percent. The Motley Fool’s Cory Renauer notes that Gilead will be releasing data from a Phase I trial in April regarding a treatment for non-alcoholic steatohepatitis. He also points out that Gilead has a tendency to understate its earnings projections.

“Anyone that listened to me since I began pounding the table on Gilead’s low valuation have enjoyed significant gains already,” wrote Renauer. “Despite the rise, I believe the more recent earnings yield—trailing earnings-per-share divided by price—of 12 percent is still compelling. This is the biotech stock to buy in April because I expect the value window to shut before the end of the month, for a couple of reasons.”

Dynavax Technologies

Dynavax Technologies Corp. , located in Berkeley, Calif., focuses on vaccines and therapies for infectious diseases and oncology. The company will be presenting data on its Phase III trial of Heplisav-B (HBV-23) in adult hepatitis B on April 18 through 20 at the National Foundation for Infectious Diseases19th Annual Conference on Vaccine Research (ACVR).

The Motley Fool’s Keith Speights admits the company’s stock would be a little speculative, and it doesn’t currently have any products on the market, but writes, “2016 could be a break-out year for the biotech.”

September 15 is the date the FDA will make a decision on Heplisav-B. The vaccine was turned down in 2013 over safety issues, but current safety data seems to indicate the vaccine is safe and if it is approved, the stock will climb.

Speights has some concerns about the company’s plans to market Heplisav-B on its own. “Dynavax will likely need to generate more cash to launch Heplisav-B. If the company opts to do so via a public offering of shares, the stock price could drop. Even with this potential dilution risk, though, I like Dynavax’s prospects over the long run.”

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