February 2, 2016
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – With the volatility of the biotech stock market, it’s nice to be able to acquire a few stocks that you don’t have to constantly monitor. Analysts at The Motley Fool picked three biotech stocks that should provide investors with some peace of mind.
Analyst Brian Feroldi said Gilead has such a diverse portfolio that investors can “comfortably buy a few shares and have confidence that the business will take care of itself.” The heart of the company’s stability is its hepatitis C offerings, Harvoni and Sovaldi, predicted to generate a combined $20 billion in revenue. Gilead has another hepatitis C drug in late-stage trials that, if approved, would be a game changing drug because it would “eliminate the need for patients to get genotype testing before initiating therapy,” Feroldi noted. Gilead also has a strong foothold in the HIV market with Stribild and Genvoya.
But it’s not just hepatitis C and HIV drugs, the company has a robust pipeline with more than 26 clinical programs.
However, Gilead is facing its share of scrutiny over the pricing of Harvoni and Sovaldi, which have treatment costs of $84,000 and $94,500, respectively, for 12-week regimens. At the end of January, Massachusetts Attorney General Maura Healey threatened Gilead with a lawsuit over the pricing of the two hepatitis C treatments, saying the process may constitute an unfair trade practice in violation of Massachusetts law.” Additionally, last week the AIDS Healthcare Foundation filed a lawsuit challenging the patents on Tenofovir, a component in Genvoya, Gilead’s four-in-one fixed-dose combination to treat HIV/AIDS patients as well as in Gilead’s combination drug, Stribild. In its lawsuit, the foundation alleges that Gilead “manipulated the patent system and engaged in anticompetitive practices to prevent economical access” to TAF, a prodrug of the Tenofovir compound.
Gilead stock is down slightly this morning, trading at $82.93 per share as of this writing.
Amgen was selected by analyst Salena Maranjian as her pick of a stock to buy and forget. The company has about 12 drugs in Phase III testing and 10 drugs in Phase II trials. Amgen has more than a dozen drugs in early stages as well. Amgen has nine biosimilar molecules in its pipeline, with the potential to launch five of its biosimilars between 2017 and 2019. The most advanced is ABP 501, a biosimilar for Humira. In Oct. 2015, Amgen announced positive Phase III results of ABP 501, a biosimilar to Humira (adalimumab) in patients with rheumatoid arthritis. In October, Amgen and Dublin-based Allergan Inc. announced positive results in a Phase III trial for ABP 215, a biosimilar to Roche ’s cancer drug Avastin, used to treat advanced non-squamous non-small cell lung cancer (NSCLC).
In addition to Amgen’s pipeline, Maranjian points out the stock pays out a dividend of about 2.6 percent. Amgen stock is slightly down, trading at $150.01 per share this morning as of this writing.
Motley Fool’s Sean Williams selected Celgene as his stock to own.
“It (Celgene) has four drugs on pace to deliver $1 billion (or more) in sales in 2016. This list includes multiple myeloma blockbuster Revlimid, which could deliver $7 billion in sales by 2017; Pomalyst, another multiple myeloma treatment; cancer drug Abraxane; and anti-inflammatory pill Otezla,” Williams said.
Celgene has the ability to grow organically, as well as through partnerships and acquisitions, Williams said. In June Celgene acquired a $1 billion stake in Juno as the two companies entered into a 10 year collaborative agreement to leverage combined immunology and oncology expertise to develop treatments for cancer and autoimmune diseases. The collaboration will have with an initial focus on Chimeric Antigen Receptor Technology (CAR-T) and T Cell Receptor (TCR) technologies.
Additionally, Celgene acquired Receptos, Inc. for $7.2 billion to enhance the company’s inflammation and immunology portfolio. Receptos brought some key drugs into Celgene’s pipeline, including Ozanimod, an oral once-daily, selective sphingosine 1-phosphate 1 and 5 receptor modulator used in the treatment of ulcerative colitis, irritable bowel syndrome and relapsing multiple sclerosis.
At the end of 2015, Celgene was able to alleviate some investors’ fears when the company announced it had settled a patent dispute with Natco Pharma Ltd. over multiple myeloma treatment Revlimid. In 2014, Revlimid was responsible for 65 percent of Celgene’s sales. Starting in March 2022, Natco will begin selling generic Revlimid in the U.S., with some volume restrictions in place. In 2026, it will be able to sell the generic version without limitations. Although covered by various patents, the primary patent expires in 2019 and the final patent expires in 2027—which should ensure steady revenue for Celgene through at least the mid-2020s.
