3 Biotechs Facing Stiff Headwinds in 2018

Published: Feb 14, 2018 By

Finance

The stock market has been rocky recently, but overall the biotech market appears to have been comparatively stable. From about November 10, 2017 to February 12, 2018, the Nasdaq Biotech ETF had risen about three percent. But not all biotech stocks have held their ground, and at least three have fallen by more than 15 percent. Michael Kramer, writing for Investopedia, looks at why he thinks these three companies may continue to drop.

1. Tesaro

Headquartered in Waltham, Massachusetts, Tesaro focuses on oncology. It has two products on the market, Varubi (rolapitant) and Zejula (niraparib). Varubi is prescribed to treat and prevent nausea and vomiting associated with chemotherapy. Zejula is for patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in complete or partial response to platinum-based chemotherapy.

Kramer writes, “Tesaro shares have fallen hard and are down nearly 70 since peaking at around $190 about a year ago, as the competition to treat ovarian cancer picks up. The bad news is that the technical chart suggests that more losses may lie ahead for the stock and could result in the price declining by another 16 percent to roughly $49, from its closing price of $58.60 on February 12.”

2. Alnylam Pharmaceuticals

Based in Cambridge, Massachusetts, Alnylam develops therapeutics based on RNA interference (RNAi). The company has a deep pipeline that includes four programs currently in late-stage clinical trials. On February 1, the U.S. Food and Drug Administration (FDA) accepted its New Drug Application (NDA) for patisiran to treat hereditary ATTR (hATTR) amyloidosis. It also gave it priority review with a PDUFA date of August 11, 2018.

“Shares of Alnylam have stalled at approximately $140 since November,” Kramer writes, “and have since fallen to roughly $117. But the stock may not be finished dropping, and could decline another 25 percent to about $89 from its closing price of $117.30 on February 12.”

In November 2017, Alnylam presented Phase III data for patisiran in hATTR amyloidosis with polyneuropathy at the 1st European ATTR Amyloidosis Meeting for Patients and Doctors in Paris, France. Ionis Pharmaceuticals also presented new data from its Phase III NEURO-TTR study of inotersen in hATTR. The two therapeutics have not been evaluated in head-to-head trials, so comparisons aren’t precise, but in the studies, Alnylam’s drug appears to be better.

However, Alnylam’s product is given by transfusion, requiring patients to come to a physician’s office or infusion center. Ionis’ treatment can be self-administered at home. It seems Alnylam would have a potential catalyst to its stock later in the year if the FDA approves patisiran, but it may face competitive headwinds if Ionis’ product is also approved.

3. Regeneron Pharmaceuticals

Located in Tarrytown, New York, Regeneron has six FDA-approved drugs and a strong pipeline of 15 products in various diseases, including asthma, pain, cancer and infectious diseases. Six are in collaboration with Paris-based Sanofi. On February 8, it presented 2017 financial information, reporting total revenues of $5.872 billion, up 21 percent from its 2016 total revenue figure of $4.860 billion.

Kramer writes, “Regeneron shares have been a significant disappointment since peaking at the end of June 2017, having fallen by nearly 35 percent, as competition against its drug Dupixent has increased. Regeneron recently fell through a critical support level around $352 on above-average volume. With a crucial support level broken, the stock has room to drop to around $275, a decline of 20 percent from its closing price of $342.67 on February 12.”

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