On Monday morning, gene therapy company Uniqure NV (NASDAQ:QURE) announced it had inked a deal with Bristol-Myers Squibb Co. (NYSE:BMY) that would provide Uniqure with a lot of cash and provide Bristol-Myers Squibb access to what looks like a very promising cardiac drug.
Specifically, Bristol-Myers is investing at least $32 million to take on a 4.9% stake in QURE — in addition to paying an upfront, outright fee of $50 million — in exchange for rights to gene therapy drug S100A1, which has been shown to restore much of the heart’s function in congestive heart failure patients.
The deal also opens the door for access to nine other gene therapy drugs Uniqure NV is working on, each of which could also spur a nine-figure payout from Bristol-Myers Squibb.
The news clearly bodes well for other healthcare stocks in the gene therapy space, either as partners with major pharma companies, or perhaps even as outright acquisition targets.
While hope of a buyout alone is never a good reason to own a stock, the prospect sure doesn’t hurt. With that in mind, here are five gene therapy stocks besides QURE that investors may want to put on their radars.
Gene Therapy Healthcare Stocks — Celladon Corp (CLDN)
Celladon Corp. (NASDAQ:CLDN) hasn’t been an easy stock to own at any point since its IPO in early 2014; double-digit swings both higher and lower have been the norm the whole time, and that’s not apt to change anytime soon.
Still, for those who can stomach the volatility, there’s possibly a light at the end of the tunnel for this gene therapy name.
The company has a decent-sized gene therapy pipeline, though there’s little doubt as to the centerpiece: Mydicar, an enzyme-targeting therapy for systolic heart failure. It’s currently in phase 2 testing, with a key update due before the end of the month.
In the meantime, CLDN serves up rather predictable swings, for speculators itching for some short-term activity.
Gene Therapy Healthcare Stocks — Bluebird Bio (BLUE)
The FDA’s breakthrough designation for BB305 –– better known as LentiGlobin — doesn’t absolutely guarantee the agency is going to give it the green light once Bluebird Bio Inc. (NASDAQ:BLUE) finishes its trials of the beta-thalassemia major gene therapy drug. But, given the dire need such a designation implies, it’s tough to think this story has anything but a happen ending.
Meanwhile, the company’s Lenti-D gene therapy for Adrenoleukodystrophy, or ALD, is even further along the development pipeline than LentiGlobin.
Interestingly, Celgene Corporation (NASDAQ:CELG) beat Bristol-Myers Squibb to the partnering-rather-than-purchasing punch, teaming up with BLUE to develop chimeric antigen receptor (CAR) T-cells, which target and destroy cancer cells. That arrangement leaves open the possibility of other beneficial partnerships in the future.
Gene Therapy Healthcare Stocks — Biogen (BIIB)
Yes, you read that right. After getting out of the gene therapy game a few years ago when it looked like a dead end, Biogen Inc. (NASDAQ:BIIB) is now wading back into those waters now that the premise holds a little more promise.
It’s still not a pure play, and likely wouldn’t be a for a long time. But, Biogen has advantages most of the younger, startup gene therapy developers don’t: money, clout and experience.
BIIB has already put some of all three to work, by quietly partnering with two Italian outfits to work on genetic therapies for hemophilia.
Now that it has played its cards, though, it shouldn’t be surprising if Biogen continues to buy its way back into the business. That may be even better (and cheaper) than developing its own gene-based biotechnologies.
Gene Therapy Healthcare Stocks — Applied Genetic Technologies (AGTC)
Applied Genetic Technologies Corp. (NASDAQ:AGTC) recently filed a new investigation drug application with the FDA to study the treatment of X-linked retinoschisis.
X-linked retinitis pigmentosa, or XLRP, is inherited condition that can lead to vision loss in boys and young men. The most common form of XLRP is caused by mutations in the RPGR gene, but AGTC is developing a treatment for this specific form of XLRP.
Applied Genetic Technologies expect to see clinical results for this program before the end of 2015, but the approach showed strong promise in preclinical studies.”
EDITOR’S NOTE: A previous version of this commentary noted Genzyme and Applied Genetic Technologies were actively collaborating on an AMD drug. The article has since been edited to reflect that this co-development relationship no longer exists.
Spark Therapeutics (ONCE)
It’s only a few months old as a publicly-traded company, still hearing the echoes of its late-January IPO. But, the return Spark Therapeutics Inc. (NASDAQ:ONCE) has doled out since then sends a clear message that investors like its potential.
ONCE stock priced at $23 for its IPO. The stock has tripled since then and now trades above $71.
Spark Therapeutics has a compelling pipeline of gene therapy drugs, but SPK-RPE65 is creating most of the bullish buzz right now, as a treatment for inherited retinal dystrophies. Not only is it in phase 3 testing, but it has also been given a breakthrough drug designation and an orphan drug status. That bodes well for an approval, and soon.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
