2 Bay Area Biotechs That Jumped While Its Peers Cratered

Stock

Since Friday, the stock market has been volatile, to say the least.  According to CNN Money, so far this morning the Dow dropped about 100 points after opening, but recovered with a 100-point gain. Yesterday, the Dow dropped 567 points early and then corrected, ending the day with a gain of 567 points. Monday’s drop of more than 4 percent was the worst for the Standard & Poor’s 500-stock index since August 2011, and the Dow Jones industrial average fell more than 1,000 points, the biggest drop ever.

While many companies’ shares dropped, at least two biotech companies were contrarians and gained. Keith Speights, writing for The Motley Fool, looks at the two against-the-current companies.

1. ARMO BioSciences

Located in Redwood City, California, ARMO BioSciences may be proof that timing is everything. The company conducted its initial public offering (IPO) on January 26, only days before the market had a spasm. The company is a late-stage immuno-oncology company, and the way the stock popped suggests investors wanted in.

ARMO released additional data from its clinical trial of AM0010 (pegilodecakin) in non-small cell lung cancer (NSCLC) on Dec. 9, 2017. In the 27 patients who had already received a median of two previous therapies who received AM0010 in combination with either nivolumab or pembrolizumab, showed a durable rate of tumor shrinking of 41 percent.

“We have observed ORRs for AM0010 in combination with anti-PD-1 immune checkpoint inhibitors that are higher than reported for immune checkpoint inhibitors alone at all levels of PD-L1 expression,” said Joseph Leveque, ARMO’s chief medical officer, in a statement. “We also are encouraged by responses in patients with liver metastases and low tumor mutational burden (TMB), two subsets of patients that are less responsive to current therapies. Six of eight patients with NSCLC metastases to the liver had a reduction of the liver metastases of more than 50 percent. Five of eight patients (62.5%) with low or intermediate TMB had a tumor reduction of at least 50 percent.”

Speights notes, “Obviously, investors were ready to get their hands on ARMO BioSciences stock, regardless of what was going on with Wall Street.”

Shares are currently trading at $36.69.

2. Iovance Therapeutics

Located in San Carlos, Calif., Iovance focuses on immuno-oncology as well. On Sept. 25, 2017, it announced the closing of its public offering of 8,846,154 shares of its common stock at a public offering price of $6.50 per share. Shares are currently trading for $16.80.

On January 24, the company released preliminary data from its two Phase II trials of its tumor-infiltrating lymphocyte (TIL) technology. The first trial was for C-145-03 in patients with recurrent and/or metastatic squamous cell carcinoma of the head and neck. Three of the eight patients treated with LN-145 showed a decrease in tumor size of at least 30 percent and were noted as a Partial Response (PR). The Objective Response Rate (ORR) so far in the study is 38 percent.

The second study was from C-145-04 to evaluate LN-145 in recurrent, metastatic or persistent cervical carcinoma. Only two patients were evaluable, one confirmed Partial Response and one had stable disease.

Again, this is likely a case of investors eager to invest in a promising company shortly after an IPO. Speights writes, “In Iovance’s case, the last few days were just a continuation of strong gains racked up in 2018, with the biotech stock more than doubling…. Within a few days, the company sold $172.5 million of its stock to generate capital to fund its ongoing clinical trials.”

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