With numerous clinical and regulatory catalysts on the near-term horizon, biotech stocks should finish the year in strong fashion. This month, for instance, Amarin Corp. (NASDAQ: AMRN), CRISPR Therapeutics (NASDAQ: CRSP), and Geron Corp. (NASDAQ: GERN) are all slated to roll out big news that may shape the industry's outlook for the remainder of the year.
This trio of high-risk, high-reward biotech plays could, in fact, all skyrocket as soon as next week. Armed with this insight, here's a deeper look at what investors should be on the lookout for in the coming days with these potentially explosive biotech stocks.
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1. Amarin: The wait is almost over
After almost seven long agonizing years, Amarin's large cardiovascular outcomes trial known as Reduce-It for its prescription omega3 pill Vascepa could read out as early as next week. The long and short of it is that management announced last week that Reduce-It's database was on track to be locked by the end of August.
While it's unclear how long a formal statistical analysis of this fairly large trial (8,175 patient study) will take, there's at least an outside chance that the company might burn the midnight oil over the long holiday weekend in order to roll out a top-line readout next week.
Why does this trial matter? Apart from being the next major trial to evaluate the cardiovascular benefits of omega3 supplementation in general, these data have the potential to grow Vascepa's target market in exponential fashion. If Reduce-It hits its primary endpoint, after all, Vascepa's peak sales are projected to eventually reach close to $2 billion within a decade. As a result, Wall Street expects Amarin's shares to more than double in value from current levels if this trial is a smashing success.
The clear and present danger, however, is that omega3 supplementation has yet to show a definitive cardiovascular benefit across the majority of studies conducted so far. Vascepa could break this negative trend, due to its unique formulation (pure eicosapentaenoic acid) that's being administered at fairly high doses (four grams per day) in this study. But we won't know for sure until the data are released. Fortunately, investors shouldn't have to wait much longer to find out the answer.
2. CRISPR makes history
Last Friday, news broke that CRISPR and partner Vertex Pharmaceuticals (NASDAQ: VRTX) opened enrollment in the first-ever company-sponsored trial designed to assess a CRISPR/Cas9 based therapy in human subjects.
The therapy, CTX001, is initially being evaluated in a rare blood disorder called beta thalassemia at a single trial site in Regensburg, Germany, according to clinicaltrials.gov. The two companies are currently working to resolve a clinical hold by the U.S. Food and Drug Administration on the same therapy as a potential treatment for sickle cell disease as well. Unfortunately, CRISPR and Vertex have yet to give any guidance as to when U.S. regulators might clear CTX001 for human trials stateside.
How might this clinical update impact CRISPR's stock? CRISPR's valuation has taken a beating in the last few months, thanks to CTX001's clinical hold in the U.S., as well as a flurry of negative journal articles questioning the safety of this gene-editing technology. This long-awaited clinical update for CTX001 might prove to be a turning point, however. After all, this early-stage trial should only take a few short months to produce a top-line readout, and it will also provide critical data needed to assess the viability of the company's novel approach to drug development in general.
3. Geron: News incoming
Geron is expecting Johnson & Johnson (NYSE: JNJ) to announce its decision regarding imetelstat's clinical program before the end of the month. The pair are developing imetelstat as a monotherapy for the devastating blood disorders myelofibrosis and low-risk myelodysplastic syndromes.
However, there's good reason to believe that this material event will become a known quantity for Geron's shareholders within the next week or so. J&J, after all, is set to hold a conference call on Sept. 13 for investors on the status of its pharmaceutical business. Consequently, the pharma behemoth will probably make a "go" or "no-go" decision on imetelstat ahead of this conference call.
The good news is that imetelstat doesn't appear to be in serious danger of being punted at this point. J&J has continually listed the drug as a top blockbuster candidate on its pharma pipeline presentations throughout the year, and the company is reportedly looking to hire a pricing manager to handle imetelstat's commercialization abroad.
Will a positive continuation decision cause a spike in Geron's share price? This question, though, is arguably less clear at this stage. If Geron chooses to opt in, it only stands to receive a $65 million milestone payment and it will be responsible for up to 20% of the drug's development costs moving forward. In that case, Geron's stock might actually head lower after its recent run-up.
But if the company opts out and takes door number two that leads to a $135 million milestone payment, Geron's shares should push higher moving forward. By opting out, Geron would have the financial resources in place to seriously consider the pursuit of additional clinical candidates. The company also wouldn't have to worry about financing imetelstat's late-stage development. Taken together, these two positive developments should act in concert to drive the company's shares northward.
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George Budwell owns shares of Geron and Johnson & Johnson. The Motley Fool owns shares of CRISPR Therapeutics and Johnson & Johnson and has the following options: short October 2018 $135 calls on Johnson & Johnson. The Motley Fool recommends Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.