When it comes to biotech stocks, it's no secret that regulatory and clinical catalysts can generate enormous returns -- or losses -- for investors in the blink of an eye. With this in mind, let's take a deeper look at seven biotech stocks with highly anticipated catalysts scheduled for 2017 that could fuel jaw-dropping moves in their respective share prices.
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The small-cap cancer immunotherapy companyAgenus (NASDAQ: AGEN)is set to initiate an early stage clinical trial for its second anti-CTLA-4 antibody, AGEN2041, in 2017, andadvance its other anti-CTLA-4 antibody,AGEN1884, intocombination studiesin the first half of 2017. Agenus is thus on track to have multiple checkpoint inhibitors in clinical trials next year, and the biotech's share price is starting to reflect this fact by jumping nearly 40% in just the last four weeks:
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As nearly all of Agenus' checkpoint inhibitors have the potential to capture hundreds in million in sales for their various indications, there's little reason to believe this stock will lose momentum anytime soon.
TheRNA interference drugmakerAlnylam Pharmaceuticals (NASDAQ: ALNY)is expected to release top-line data for its ongoing phase 3 trial of patisiran as a possibletreatment for familial amyloidotic polyneuropathy (FAP) form of transthyretin-mediated amyloidosis (ATTR) in the second half of 2017. After that, if the study is positive, the biotech plans on submitting regulatory applications for patisiran in both the U.S. and EU, putting a regulatory approval on track for perhaps early 2018. While not quite a blockbuster, patisiran's peak sales are still estimated to exceed $700 million, which would provide a much-needed lift for a company that's been burning over $100 million per quarter of late.
The small-cap oncology companyClovis Oncology, Inc. (NASDAQ: CLVS)should release top-line data from itsARIEL3 pivotal maintenance study for the PARP inhibitor rucaparib in patients with platinum-sensitive, high-grade serous or endometrioid epithelial ovarian, primary peritoneal or fallopian tube cancer by mid-2017.
If positive, Clovis plans to submit regulatory applications for the drug's maintenance indications in tumor BRCA mutant patients and BRCA-like patients. The short story is thatrucaparib is forecast to pull in close to $1 billion in sales as a treatment for these various forms of ovarian cancer, making it a key experimental drug to watch next year.
Exelixis (NASDAQ: EXEL), a mid-cap oncology company,is on track to complete its ongoing phase 3 trial dubbed "Celestial" for its flagship kinase inhibitor,cabozantinib,in advanced liver cancer by October of this year. As such, the biotech should release top-line results from this trial sometime in the first quarter of 2017.
Although this pivotal-stage trial is for a later line of therapy, a successful readout could lead to the drug's third approved indication, with the other two being for advanced kidney cancer andmedullary thyroid cancer. The key takeaway is that all three indications together have the potential to drivecabozantinib sales over the $1 billion mark.
Kite Pharma (NASDAQ: KITE) is expected toreport top-line data from a pivotal-stage trial assessing its chimeric antigen receptor T cell (or CAR-T) therapy,KTE-C19, in aggressive non-Hodgkin lymphoma patients before year's end. That puts a possible regulatory filing in play by mid-2017. Industry experts have suggested that KTE-C19 could rake in peak sales of around $1.7 billion-- that is, if it continues to elicit unprecedented response levels in this hard-to-treat malignancy. That said, CAR-T therapies have run into some serious problemsin terms of safety, and their scalability on a commercial level remains an open question.
The clinical-stage vaccine makerNovavax (NASDAQ: NVAX) is charging toward a pivotal data readout for itsF-protein nanoparticle RSV vaccine candidate (RSV F vaccine) in older adults in the third quarter of 2016. As this vaccine candidate has been blessed with the coveted Fast Track designation from the FDA, Novavax is hoping to transform into a commercial operation by perhaps mid-2017 -- assuming the vaccine performs as expected in its ongoing late-stage trial. While analysts' estimates vary, the bottom line is that this first indication for the biotech's experimental RSV F vaccine has the potential to generate at least a billion in sales, if not much, much more.
Trevena (NASDAQ: TRVN), a clinical-stage biotech developing drugs targeting G-protein coupled receptors,should report top-line phase 3 data for its APOLLO 1 and APOLLO 2 trials assessing the experimental compound oliceridine as a treatment for moderate to acute pain in the first quarter of 2017. Although quantitative estimates of the drug's peak sales potential are scarce at the moment,oliceridine would enter a market that's already valued in excess of $11 billion, and is still growing at a healthy clip. Perhaps the biggest issue is that oliceridine stands to grab a nice chunk of this major drug market as a viable alternative to morphine, depending on its forthcoming late-stage results.
Are any of these stocks screaming buys?
While seasoned biotech investors are fully aware that you should never count your genetically modified chicken eggs before they hatch,there are really good reasons to think thatAlnylam, Novavax, and Trevena are compelling buys right now.
First off, Alynylam's patisiran has produced some extremely encouraging results in its phase 2 open-label extension (OLE) study in terms of its ability to drive positive changes in theneuropathy impairment score out to 24 months.These initial OLE data strongly suggest that patisiran can effectively slow neuropathy progression in patients with FAP, which bodes well for the drug's ongoing late-stage trial. Even so, the company's stock has gotten absolutely pounded this year (down nearly 28%) as part of the broader pullback among biotech stocks at large -- perhaps making this orphan drugmaker a great pick for risk-tolerant investors.
Novavax and Trevena, on the other hand, are working on game-changing products that arguably have no real peers on the horizon. Moreover, the phase 2 data for each company's lead product candidate suggests that they stand a better-than-average shot at hitting the mark in their respective pivotal trials. So, even though nothing can be taken for granted when it comes to clinical-stage biotechs, and negative readouts are a real possibility in both cases, the odds do appear to be skewed in their favor at this point.
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George Budwell has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alnylam Pharmaceuticals and Exelixis. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.