For companies involved in the research of drugs, no catalyst is able to trump coming out with clinical trial results. For each of the companies mentioned in this article, investors are expecting results rather soon--and with large implications. These results have the potential to move their underlying stocks and should be a focus for catalyst oriented investors, and are of course important to know for long oriented investors.
Gilead Sciences Inc
It has been a good month so far for Gilead Sciences Inc (NASDAQ:GILD) shareholders with the company releasing fantastic sales numbers. Investors are hoping that the recent uptrend continues upon the release of the company's phase three HIV trial. The trial is testing the effectiveness of Gilead's Tenofovir alafenamide fumarate (TAF) drug, with results expected before the end of the year. The drug is a derivative of Gilead's currently marketed drug Viread. Viread loses patent protection in 2018, so getting TAF approved before then would be a big step in helping to secure Gilead's lead in the HIV marketplace. We do not have numbers for the individual sales potential for TAF, but it will play a substantial part in meeting the projected $11.8 billion for Gilead's HIV drugs in 2018. The drug will be very important, as in previous testing it was shown to have advantages in terms of bone and renal function over Tenofovir alone. This will be very important for Gilead, as if these advantages hold true, they should be able to convince doctors to switch over to TAF (which has longer patent protection) from Tenofovir, and thus minimize the impact of generic competition on Tenofovir sales.
Investors in Intercept Pharmaceuticals (NASDAQ:ICPT) are awaiting important clinical trial results for their phase 2 Flint Trial , which are expected in August. This trial is being conducted for Intercept's obeticholic acid drug, which is intended for the treatment of NASH. Very quickly for those of us not familiar with NASH, it is a chronic liver disease for which there is no approved drug. This trial has the potential to be very important, and lucrative for Intercept, as there are an approximated $615 million in off-label prescriptions for NASH each year. Should Intercept be able to announce positive results in its NASH study, it could very well set the drug up for FDA fast track designation, which would help to shave time off of the approval process and should help shareholders. Intercept needs this trial to succeed, as that will put it one step closer on the path to finally obtaining revenue.
Turning towards the small-cap side, XOMA Corporation (NASDAQ:XOMA) is expecting important clinical trial results any time now from its partner Servier. They are testing Xoma's drug Gevokizumab. The companies are developing the drug in a variety of indications, however, the results that are expected out relatively soon are from the company's phase III trial in Buhcet's Disease. Investors will need to watch closely, as this may be the drug to finally turn XOMA around. The company has had an unfortunate history of clinical trial failures for its previous drug development attempts. Any possibility, however, of Gevokizumab being effective in buhcet's disease would bolster investors confidence regarding the ability to get Gevokizumab approved. This is perhaps the biggest catalyst of the three mentioned in the article, as Gevokizumab is very possibly life or death for XOMA, so positive results should send the shares much higher. The company does not currently have any products on the market, so it will need to generate revenue relatively soon. This is why these results are crucial as Gevokizumab is Xoma's furthest advanced pipeline product. Should the trial succeed, it would be a pat on the back to Xoma management, and would bolster investor confidence. However, should the trial not succeed it will be a big blow for Xoma investors.
Each of these companies are expecting results that have the potential to change the way that they do business. For Intercept and Xoma, it is a chance to finally move a drug closer to the market, and for Gilead, a chance to continue their domination of the HIV marketplace. Each one of these events should help to move their respective shareprices, and as such each are interesting catalyst stocks for shareholders.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.