The statistics of the effects of cancer in the U.S. are sobering. By the end of this year, there will be nearly 1.7 million new cancer cases, according to the National Cancer Institute. Approximately 600,000 will succumb to the disease, making the research conducted by oncology therapeutic firms all the more critical.
Naturally, cancer-fighting stocks have both a humanitarian and profitability component, but their prospects have soured over the past year.
However, recent data suggests that investors are opening their hearts and wallets to this life-saving sector.
Much of the volatility experienced by cancer-fighting stocks can be traced to the underlining biotechnology industry. The benchmark exchange-traded fund iShares NASDAQ Biotechnology Index (IBB) absorbed some ugly hits after peaking in the summer of 2015.
Further scandals and charges of corruption, price gouging and financial chicanery have sadly cast a dark shadow on biotech as a whole. In the past 52 weeks, IBB is down 27%, while year-to-date, it’s down 22%.
Unfortunately, wherever there is money to be made, fraudulent behavior is sure to follow. Biotech and the broader healthcare industry are not immune to this fact. But regardless of the public relations damage that has been done, cancer-fighting stocks are making progress where it matters the most — delivering therapies.
The number of people living beyond a cancer diagnosis is expected to rise from approximately 15 million in 2014 to 19 million by the year 2024. That is largely due to treatments that push the boundaries of scientific innovation.
Here are three cancer-fighting stocks that may return handsome profits — and save lives in the process.
Cancer-Fighting Stocks to Buy: Endocyte, Inc. (ECYT)
Biopharmaceutical company Endocyte, Inc. (ECYT) has suffered quite a volatile ride.
Over the past five years, ECYT is down 70% — the worst such performance among the cancer-fighting stocks on this list.
Fortunately, there appears to be some light at the end of the tunnel. Since Feb. 22 of this year, ECYT has gained over 8%. In addition, shares appear to be forming a bullish trend channel, charting a series of higher highs and higher lows.
ECYT shareholders got a fundamental boost thanks to narrower-than-expected losses put up by the company’s first quarter of fiscal year 2016 earnings results. ECYT absorbed a loss of 24 cents per share, while consensus estimates pegged it at -26 cents.
Click to Enlarge Helping the figures was a 1.3% year-over-year reduction in research and development costs, which primarily stemmed from a completed drug trial. Also, general and administrative costs were slashed by more than 12%, mostly due to cuts in legal and professional services.
Moving forward, the market value of ECYT will depend largely on their cancer-fighting drug trials. Of particular interest is EC1456 — a potential treatment for late-stage tumors — and their prostate cancer drug EC1169. ECYT has forecasted that R&D spending will noticeably rise in the second half of this year due to the testing of these drugs. In addition, efficacy data is expected from EC1169 by late 2016 or early 2017.
While it’s anybody’s guess as to the trials’ outcomes, investors will be encouraged that ECYT is putting effort into keeping their financials as stable as possible.
Cancer-Fighting Stocks to Buy: Seattle Genetics Inc. (SGEN)
Seattle Genetics, Inc. (SGEN) is the high-flyer among mid-tier cancer-fighting stocks. After taking a wicked hit in the month and a half following the new year, SGEN has gained a good chunk of it back.
In the past three months, SGEN is up nearly 28%. Technically, the bulls are attempting to find some range of stability after SGEN failed to build off last year’s high of nearly $52.
Fortunately, recent developments look very encouraging. This week so far, SGEN is up 16%, and thing could look better still.
Click to Enlarge The first piece of evidence is from the company’s Q1 results. Although SGEN failed to deliver the goods on earnings — taking a 15 cent loss on expectations of losing only 9 cents — there was plenty to be optimistic about. Royalty revenue from international sales of Adcetris — the only commercial product of SGEN — nearly tripled to $32.3 million from $11.1 million in the year-ago quarter.
Industry giant Takeda Pharmaceutical Co. Ltd. (ADR) (TKPYY) sells Adcetris outside the U.S. and Canada.
What has investors of cancer-fighting stocks really excited is Seattle Genetics’ increased product pipeline. SGEN will research other derivative solutions from Adcetris, which is currently used to treat lymphomas. In addition, SGEN will conduct experiments on 12 new drugs, which are in various stages of clinical trials.
Unlike other embattled cancer-fighting stocks, SGEN has a strong balance sheet with no debt. This gives the company the financial leverage necessary to pump the drug pipeline without making investors nervous.
SGEN is clearly in it for the long haul, which should provide potential buyers with a lot of confidence in an otherwise shaky industry.
Cancer-Fighting Stocks to Buy: Juno Therapeutics Inc. (JUNO)
As with other cancer-fighting stocks, 2016 didn’t exactly start out the way the management team from Juno Therapeutics Inc. (JUNO) imagined.
JUNO opened up the first month of the year deep in the red, dropping 37% in the markets. Since then, however, JUNO stock has made significant strides. Over the past 90 days, shares are up double digits.
Technically, JUNO has stabilized in an upward leaning trend channel. Now, all it needs is a fundamental catalyst.
Similar to many mid-tier cancer-fighting stocks, JUNO isn’t exactly going to win over investors with its financials alone. Instead, it has to rely upon its scientific expertise, of which JUNO has plenty. The company specializes in genetic engineering to root out and fight cancer cells.
If perfected, that would provide a focalized treatment as opposed to current methodologies like radiation therapy, which can destroy healthy cells.
Several Wall Street analysts have seen enough of the JUNO technology to jump onboard. Cowen and Co. recently started covering JUNO stock, giving it an “outperform” rating. Last February, two investment firms — Citigroup and Guggenheim Securities — issued a buy recommendation.
The point of emphasis is that JUNO will live and die by its clinical trials. That said, it would appear that those in the know have bullish leanings.
It is certainly on the speculative side of things, but should JUNO break new scientific ground, there’s no telling how high the stock could go.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.