Investing in small biotechnology companies is a high risk, high reward endeavor and risk management in this space is crucial as entire investments can be wiped out with non-favorable data and/or press release. At the same time, in a relatively short period of time, investors can realize a several-fold increase in their investment(s) with promising data and/or press release-ten to fifteen-fold increases in share price are not unheard of. So how can an investor who wants to take part in such a volatile sector minimize the risk and stack the odds in their favor? Part of a successful risk mitigation strategy is to find companies with robust pipelines. One of the main, if not the main, criteria of successful future biotech investing is finding companies with strong, free flowing pipelines with promising drug candidates.
Antares Pharma (AIS) and Immunomedics (IMMU) are two biotech companies with market capitalizations of less than 300 million dollars that have strong pipelines with promising drug candidates.
Antares Pharma focuses on topical gel-based and self-injection pharmaceutical products. Their unique drug delivery systems improve existing treatments by decreasing side effects and increasing efficacy and patient compliance. The company has three drug delivery systems: the ATD Advanced Transdermal Gel Delivery system, the Easy Tec oral disintegrating tablets, and injection technology platforms such as Vibex disposable pressure assisted auto injectors and Vision reusable needle-free injectors. Big pharma has taken notice of their technology as TEVA (TEVA), Pfizer (PFE), and Watson (WPI) are partnering with Antares. Antares currently has two FDA approved products-Tjet/Zomajet for HGH deficiency and Elestrin for Menopause. Tjet/Zomajet is partnered with TEVA, Ferring, JCR in different territories and Elestrin is partnered with Jazz Pharmaceuticals (JAZZ). With 10 programs under development, 9 of which are in partnership with some of the biggest names in pharma and the generics market, Antares has one of the more robust pipelines among its peers.
Clinical Trial Status
TEVA, Ferring, JCR
Oxybutynin 3% Gel (Anturol)
Over Active Bladder
Vibex MTX (methotrexate)
Antares has a market capitalization of 254 million and currently trading at $2.49 with a 52-week range of 1.50 - 2.88. The company has approximately 26 million in cash and short-term investments with no debt.
Immunomedics is another small biotech company with a big pipeline. They are focused on developing monoclonal antibodies for treatment of diseases such as cancer and autoimmune disorders. Immunomedics currently has 12 programs in their robust pipeline with their lead compound, epratuzumab, showing great promise in the treatment of systemic lupus erythematosus or lupus. The Lupus Foundation estimates that lupus afflicts 1.5-2 million Americans with the majority of the cases affecting women. It is a chronic, debilitating, and potentially fatal autoimmune disorder. Epratuzumab has the potential to become the blockbuster that Benlysta from Human Genome Sciences (HGSI) may never be.
Epratuzumab is a humanized anti-CD22 monoclonal antibody that binds and modulates B-cell function without significant depletion of these immune system cells. In the EMBLEM trial-a phase IIb study that randomized 227 patients to one of six intravenous regimens-epratuzumab demonstrated efficacy by the fourth week. By week 12, patients randomized to the 600 mg weekly dose showed a significant response by improvements in their BILAG A/B scores to BILAG D in six body systems when compared to placebo.
Immunomedics has initiated two phase III studies, EMBODY 1 and EMBODY 2, to evaluate epratuzumab in patients with moderate to severe systemic lupus erythematosus. The data from these trials will continue to impress as it did with the EMBLEM study. With strong data, FDA approval and availability of epratuzumab should occur in 2015 with significant uptake by clinicians.
Epratuzumab is only one of many drug programs in the pipeline of Immunomedics. Their entire pipeline is listed below.
Systemic Lupus Erythematosus
Immune Thrombocytopenic Purpura
Chronic Lymphocytic Leukemia
Vmab plus Y-90 Emab
Diffuse Large B-Cell Lymphoma
Chronic Lymphocytic Leukemia
Immunomedics has a market capitalization of 260 million dollars and currently trading at $3.42 with a 52-week range of 2.85-4.47. The company has 21 million in cash and equivalents and no debt.
Disclaimer: All information is provided for informational purposes only and does not serve as investment advice or an offer of management services. There is no guarantee that the information is accurate. All information is subject to change, amendment, and correction without any notice. Any mention of current and past results does not indicate any future expectations or results. All investments are associated with risks and loss of money. Consult with a professional tax, accounting, legal, and/or investment advisor before making any investment decision.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.