Biotech stocks pop and pull back on news of Phase II and III clinical trial data, but real money is made and lost once it comes down to the dance with the FDA and tangible revenues. This summer offers many options to play FDA evaluations of key interests in the sector. Some of these entities have garnered large amounts of attention from investors outside the sector. Certainly the savvy biotech investor has already made up their mind about a position in anti-obesity contenders Arena (ARNA) and Vivus (VVUS) which have PDUFA dates of June 27th and July 17th, respectively.
There is more to the summer's FDA calendar, however, than just these two pharmaceuticals. Other stocks offer opportunities to invest in companies coming down to the wire with products that have gone through years of R&D and clinical trials. As always, due diligence is a necessity in this sector. The following touches on options worth your time to explore.
Ariad Pharmaceuticals (ARIA) - Ridaforolimus, Ariad's metastatic soft tissue sarcoma drug in licensing partnership with Merck (MRK), has a PDUFA date of June 6th. This small molecule inhibitor acts to disable a protein necessary to processes that allow cancer cell proliferation. Studies have shown a 31% reduction in risk of cancer cell progression with ridaforolimus compared to placebo. A positive FDA nod would add momentum to this stock.
June has promise to be a big month for the company for other reasons as well. Ariad is presenting additional data June 4th at the annual ASCO meeting on its chronic myeloid leukemia agent Ponatinib. This product is a multiple kinase inhibitor with potential widespread applications in oncology. Many in the industry are anticipating higher response rates compared to the 3 month study mark. Phase II study data released in December showed 58% of the evaluable chronic-phase CML patients with the T315l mutation in its PACE study achieved complete cytogenic response, meaning all cells tested following treatment were normal.
The stock is currently hovering just south of 52 week highs in the high $16 range. Recent analyst nods and an impending positive Q2 sales jump have added to the buzz. The $20 price target seems speculatively attainable with its measured progress and holds potential to surpass with a good showing in June.
Salix Pharmaceuticals (SLXP) - The gastroenterology specialist Salix offers an array of 15 approved products. Total Q1 2012 revenue was up 62% over Q1 2011, largely due to the increase in sales of Xifaxan. Crofelemer, also known as Provir, the company's drug for the control and relief of diarrhea in HIV/AIDS patients being treated with anti-viral drugs, has a PDUFA date of June 5th. Further, Salix and partner Progenix (PGNX) await a PDUFA date of July 27th for sNDA of Relistor injection for opioid induced constipation in patients with non-cancer induced pain, expanding the drug's reach. Positive Phase III data shows high tolerability and efficacy of the drug.
SLPX has seen a good year thus far, trading near its 52 week high off a solid earnings beat in Q1 2012. The company is presenting at a number of conferences in June. Though it has experienced a good deal of growth this year, the upcoming FDA dates could provide a catalyst for the stock to tick even higher through the summer.
Regeneron (REGN) - Aflibercept, also known as Zaltrap, is Regeneron's protein fusion agent developed in partnership with Sanofi Aventis (SNY), which aims to prevent angiogenesis or blood vessel development to tumors. This colorectal cancer therapy is on the block with a PDUFA date of August 4th. The widespread platform options with its protein products bode well for Regeneron, as the same iron can be tested in multiple fires, so to speak. Regeneron saw negative data with Zaltrap for the treatment of androgen-independent prostate cancer recently, as it failed to meet end points. Many are eager to hear what the FDA has to say on its usage for colorectal cancer to see if REGN can add more cherries on top of its 2012 success.
The protein product in Zaltrap has already been approved in its Elyea formulation for the treatment of age-related macular degeneration. Eylea has single-handedly made the company a major success story of 2012. The drug made $124 million in Q1 2012. Regeneron's 20 plus years and over $1 billion invested in R&D and clinical trials now have many anticipating an even bigger payoff than Eylea offered. Additional late stage prospects continue to make REGN a buy on many analysts' list despite its great run thus far in 2012. The Sanofi and Regeneron partnership has recently announced success on its additional PCSK9 lipid lowering target Phase II results in the Lancet. The drug showed a range of 28.9% -67.9% reduction in LDL cholesterol. A one year target of $151 may be surpassed with solid FDA sentiments in August coupled with continued progress in the pipeline.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ARIA over the next 72 hours.