The year 2016 has been a tumultuous one for biotech stocks. The NYSE ARCA BIOTECH INDEX has lost 16.26 percent in the year-to-date period, even as the broader market gauges have rallied to new highs. Biotech ETFs didn't fare any better. The iShares NASDAQ Biotechnology Index (ETF) (IBB) is down 19.9 percent in the year-to-date period, and the SPDR S&P Biotech (ETF) (XBI) has fallen 13.6 percent.
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In the same period, the S&P 500has gained 11.1 percent and the NASDAQ Compositehas advanced 9.5 percent and the Dow Jones Industrial Average 2 Minute has rallied 14.6 percent.
Price Gouging Rhetoric, Clamp Down Fears Trigger Swoon
What primarily ailed the space was the U.S. presidential campaign, when Hillary Clinton took up cudgels against price gouging by companies in the space. Even as biotech stocks fought back after Donald Trump's election, subsequent comments by the president-elect in a Time magazine interview that he does not like what has happened with drug prices and would bring down drug prices did not cut much ice with investors. Promptly, these stocks dove, making the sector the worst performing of the year.
Despite the backlash suffered by biotech stocks, they do hold promise, given the strong demand for drugs to treat rare diseases and increased spending on healthcare. Even as the sector fared poorly, there were some standouts that could qualify as the best biotech stocks of the year. Only those stocks trading on the main exchanges were considered for the listing.
1. Corbus Pharma: Resunab Resonating With Investors
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Corbus Pharmaceuticals Holdings Inc (CRBP) has been on a tear this year. The company's lead drug Resunab is a synthetic oral endocannabinoid-mimetic drug and is being tested for scleroderma, cystic fibrosis and dermatomyositis. The company announced in October that it has completed the Phase II study of the drug for treating sclerosis, with top line data from the study due in the fourth quarter of 2016.
The stock has gained 433 percent in the year-to-date period and is sitting pretty at $8.8.
2. CoLucid: Alleviating Investor Headaches
CoLucid Pharmaceuticals Inc (CLCD), a company engaged in developing a small molecule for the acute treatment of migraine headaches, may be a one-trick pony. All the same, it has managed to turn the investor frenzy to its advantage.
The company's migraine treatment lasmiditan is in a late-stage trial. In September, the company announced top-line data from its SAMURAI study of lasmiditan, with both primary and secondary endpoint being met. The same month, the company made a public offering of 3.2 million shares at $20 per share.
The company is now gearing up for its second Phase III study, dubbed SPARTAN, which will test oral lasmiditan in three separate doses against a placebo after two hours. The results from the study is due in the second half of 2017.
The stock has been up 334 percent in the year-to-date period, having risen from $8.37 to $36.3.
3. Exelixis Riding High On New Indication For Cabometyx
Exelixis, Inc. (EXEL)'s stock has not looked back ever since its lead drug Cabometyx, initially approved to treat thyroid cancer, was approved by the FDA for treating patients with advanced kidney cancer who progressed following treatment with drugs that starve tumors of their blood supply. The company is now testing the drug for an expanded label to include newly diagnosed patients with advanced renal cell carcinoma.
The stock is up 194 percent in the year-to-date period, rising from $5.64 to $16.56.
4. Tesaro's PARP Wonder
TESARO Inc (TSRO) Tesaro announced on Tuesday that the FDA has accorded priority review status for its ovarian cancer medication Niraparib. This keeps the company on track to get FDA approval by June 30, 2017, without having to go through an advisory committee meeting.
When Clovis Oncology Inc (CLVS), which has a competing product, presents results of its Phase III trials by the middle of the next year, Tesaro might have completed all the formalities and secured the nod from the FDA. Niraparib's efficacy in non-germline BRCA mutant patients could broaden its target audience than other PARP inhibitors and it could also be used early in the treatment process than others.
Tesaro has gained 161 percent in the year-to-date period and ended at $136.28 on Tuesday.
5. No Aches For Achaogen
Achaogen Inc (AKAO) is into developing broad spectrum antibiotics to treat multi-drug resistant bacterial infections. The bulk of the gains were made in mid-December, when the company said its lead antibiotic plazomicin showed positive results in two late-stage studies. Subsequently, the company said it would submit marketing applications with the FDA in the second half of 2017 and the European Medicines Agency in 2018.
Achaogen closed Tuesday's session at $13.21, a gain of 130 percent thus far this year.
6. PharmAthene Sizzles With Special Dividend
PharmAthene, Inc. (PIP), which announced a special dividend of $2.91 per share in November, is developing medical counter measures against anthrax. It is involved in development of two next generation anthrax vaccines. The special dividend followed a settlement amount the company received from SIGA Technologies.
The stock has gained 71 percent in the year-to-date period.
2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.