On Wednesday, Arena Pharmaceuticals, Inc. (ARNA) announced one of the drugs in its pipeline showed tremendous efficacy as a treatment for autoimmune conditions.
Given the 80% jump ARNA stock that day, the news clearly caught the market off guard.
The biggest piece of the surprise wasn’t how well APD-334 performed in its Phase 1B trial, however. Most traders reacted so fervently largely because they were surprised to learn — or had forgotten — that Arena Pharmaceuticals has much more going for it than its weight loss drug, Belviq.
In any case, the unexpected progress from Arena’s pipeline prompted investors to ask themselves a critical question about other biotech stocks: Are there any more biopharma companies with underestimated (or completely ignored) drugs in development?
As it turns out, yes there are. Here’s a look at five of the market’s biotech stocks with grossly overlooked drug pipelines.
Biotech Stocks: Celgene Corporation (CELG)
Although most headlines for biotech stocks tout how one drug was approved for one illness, the fact of the matter is, many drug compounds are effective treatments for a variety of ailments. Indeed, it’s the secondary and tertiary uses of a drug that can make a good drug a major breadwinner for a particular company.
Case in point: Revlimid and Abraxane, from Celgene Corporation (CELG). The former has been approved as a treatment for anemia caused by myelodysplastic syndrome (MDS), and also can be used as a therapy for multiple myeloma and mantle cell lymphoma. The latter is a treatment for some breast cancers, lung cancers and pancreatic cancers.
What’s largely unrecognized about Revlimid and Abraxane, though, is that Celgene is testing the pair in numerous other cancer drug trials. Although most of these trials are variations on existing approved uses, each new use and/or new market up the drug’s revenue-bearing potential without a significant incremental increase in R&D costs.
All told, Celgene has more than 40 drugs somewhere between pre-clinical and Phase 3 testing.
Biotech Stocks: Alkermes Plc (ALKS)
Prior to this week, Alkermes Plc (ALKS) wasn’t one of the market’s biotech stocks that spent a lot of time in the spotlight. That’s partly because the company is more interested in working on drug development than talking about it, and partly because Alkermes prefers not to partner up with bigger players. Instead, it’s building its own portfolio so it can develop and market its drugs the way they deserve.
It’s an approach that was proven this week, when Alkermes announced ALKS-3831 reduced schizophrenic symptoms as well as approved therapy olanzapine did, but didn’t appear to cause the weight gain associated with olanzapine. It’s a detail the FDA and insurers are bound to take notice of.
ALKS-3831 (in Phase 2 trials) is hardly the only thing Alkermes has in its bag of potential surprises for investors, though. It’s got seven more treatments in its R&D pipeline.
Biotech Stocks: Regeneron Pharmaceuticals Inc. (REGN)
Regeneron Pharmaceuticals Inc. (REGN) has made a name for itself as the developer of Eylea, Arcalyst and Zaltrap, but those approved drugs only scratch the surface of the game-changing drugs the biopharma company could end up bringing to the market.
As partial proof of this premise, this week, Regeneron announced a cholesterol drug it was developing with Sanofi SA (SNY) — alirocumab — works even better than some were expecting. Specifically, alirocumab can measurably lower cholesterol even if only injected once every four weeks.
And alirocumab is only one of three Phase 3 drugs in the Regeneron Pharmaceuticals pipeline. The company has a total of 18 clinical trials underway at this time, making it one of the market’s better-kept secrets within the world of biotech stocks.
Biotech Stocks: Incyte Corporation (INCY)
Incyte Corporation (INCY) is relatively well-known as the maker of Jakafi, for the treatment of myelofibrosis, and as of December, for the treatment of rare and progressive blood cancer known as polycythemia vera (PV).
Most fans and followers of biotech stocks, though, don’t realize there’s more to Jakafi than those two ailments, and there’s more to Incyte than just Jakafi.
As of right now, Incyte Corporation is testing seven different drugs across a span of 20 different trials. Most of those drug trials are targeting cancer, and many of them are being co-developed with major pharmaceutical names like Pfizer Inc. (PFE), Novartis AG (NVS) and Merck & Co., Inc. (MRK).
The caliber of partners speaks volumes about Incyte Corporation’s capabilities.
Biotech Stocks: Isis Pharmaceuticals (ISIS)
Most investors would be shocked to hear Isis Pharmaceuticals, Inc. (ISIS) has a drug pipeline consisting of a couple dozen different drugs and 36 different trials. Granted, less than half of them are ISIS Pharmaceuticals’ innovations. The rest are being developed for other drug makers that wish to utilize Isis’s novel antisense drug development. That’s OK, though, as Isis has a stake in the success of all of them.
Despite the unfortunately named biotechnology, the antisense drug development platform actually makes a lot of sense. Rather than attacking proteins unique to certain diseases, antisense drugs bind to specific RNA molecules and nip replication of diseased cells in the bud. It’s an approach/premise investors can’t tap into via many other biotech stocks.
As of the latest look, Isis Pharmaceuticals has six Phase 3 trials underway. Those are apt to be the most catalytic piece of the company’s pipeline at this time.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
