[Editor’s note: “7 Disruptive Biotech Stocks to Buy for 2025” was previously published in January 2020. It has since been updated to include the most relevant information available.]
Biotech is a fast-changing world, so it’s very ambitious to start looking out to 2025. Luckily RBC Capital has peered into its crystal ball to reveal the biotech stocks it believes investors should keep an eye on over the coming years.
These are “disruptive” biotech stocks that could pose a risk to key players and franchises.
That’s why I find the report so interesting. Namely:
1) it reveals fresh investing ideas (especially for longer-term investors), and
2) it highlights risks to well-known biotechs you may now own. Understanding these threats is crucial in determining whether a franchise is likely to be sustainable for many years to come.
As the firm writes: “Many of the programs detailed in our report remain early and/or high risk, but we believe they are all worth watching — especially given our view that many are overlooked by the Street, which tends to more closely follow high-profile competitors at later stages or with validated mechanisms.”
So with that in mind, let’s take a closer look at these seven disruptive biotech stocks now:
CymaBay Therapeutics (NASDAQ:CBAY) is a cutting-edge biotech company working in liver disease. Right now, all eyes are on its lead product candidate, Seladelpar. This is for the treatment of primary biliary cholangitis (PBC). PBC is a chronic disease that slowly destroys bile ducts in the liver.
The drug is a potential disruptor of Intercept Pharma’s (NASDAQ:ICPT) PBC franchise, Oclavia. As a result, investors should watch out. RBC Capital writes, “Ocaliva provides a sustainable revenue stream for the company and helps establish a stable valuation floor — and any potential emerging competition in decreased uptake could affect the base value of the stock outside of NASH.”
Furthermore, CBAY has already reported Phase II data that shows improvements upon OCA’s efficacy (especially on response rates) and potential for improvement to pruritic symptoms (i.e., itching). The company is now enrolling patients for the final Phase III trial.
According to CBAY; 1 in 1,000 women over the age of 40 live with PBC. Interested in CymaBay stock? Get a free CBAY Stock Research Report.
Atara Bio (ATRA)
Atara Biotherapeutics (NASDAQ:ATRA) is developing novel treatments for patients with cancer, autoimmune and viral diseases.
Specifically, the company is developing off-the-shelf, allogeneic T cells, which it bioengineers from donors with healthy immune function. This allows for rapid delivery to patients.
According to RBC Capital, this is a potential disruptor to pharma giant Gilead Science’s (NASDAQ:GILD) own CAR-T franchise.
“An off-the-shelf allogenic CAR-T modality, if achievable with comparable efficacy and without any safety tradeoffs, could make current CAR-T products largely obsolete, given the significant advantages in time to manufacture and potentially reduced costs of a more one-size-fits-all format vs. an individualized cellular product for each different patient” states the firm.
However, these studies are still very much in the early stage, with Atara recently reporting what it called encouraging preliminary Phase I efficacy data for ATA188. Get the ATRA Stock Research Report.
Translate Bio (TBIO)
Translate Bio (NASDAQ:TBIO) is a leading mRNA therapeutics company. It is currently developing a new class of potentially transformative medicines to treat diseases caused by protein or gene dysfunction, but the big news involves a partnership addressing a novel coronavirus vaccine.
“The Translate Bio and Sanofi Pasteur teams have generated encouraging preclinical data across multiple infectious disease targets, as part of our ongoing mRNA vaccine collaboration. This work will serve as a strong foundation as we direct joint research efforts against COVID-19 to help address this public health threat,” said Ronald Renaud, Chief Executive Officer of Translate Bio in a joint statement.
“Our collaborative efforts to combat COVID-19 will leverage Translate Bio’s innovative mRNA platform as well as Sanofi’s vaccine expertise and ongoing COVID-19 research with the goal of advancing a novel mRNA vaccine rapidly to the clinic.”
On other fronts, the company may do just as well. MRT5005 is the first clinical-stage mRNA product candidate addressing the underlying cause of cystic fibrosis (CF). This is a genetic disorder that affects mostly the lungs, but also the pancreas, liver, kidneys and intestine. Translate aims to give fully functional CFTR genes to lung cells for all CF mutations. “Such a technique could theoretically make small-molecule correctors obsolete”, writes RBC Capital.
That could spell trouble for the current cystic fibrosis powerhouse. AKA Vertex Pharmaceuticals (NASDAQ:VRTX). Vertex’s CF franchise accounts for more than $7 billion in estimated out-year revenues … nearly 100% of total revenues. What’s more, Vertex’s drugs are extremely, shockingly, expensive. As a result, the space is ripe for a new entrant. Get the TBIO Stock Research Report.
Biohaven Pharma (BHVN)
Biohaven Pharmaceuticals (NYSE:BHVN) is hitting the headlines with its potential migraine treatment, Rimegepant. Excitingly, the drug could be approved by the Food and Drug Administration very soon.
Moreover, Biohaven just inked a distribution deal with Dubai to sell its NURTEC ODT migraine drug there, and test results in the U.S. still look positive.
As a result, we are looking at a potential rival to Alder BioPharma’s (NASDAQ:ALDR) own migraine franchise. ALDR’s Eptinezumab is aiming for approval this quarter, and RBC Capital expects ALDR’s yearly revenues from the drug to top $1 billion by 2027. However, ALDR’s Eptinezumab is an intravenous infusion. And other rival drugs are injections.
That’s why Biohaven’s oral Rimegepant stands out from the crowd.
“An orally administered drug could be impactful to future uptake in the large migraine market, offering both potential convenience advantages and the potential to rapidly clear from the system in anticipation of a planned pregnancy” cheers RBC Capital. Get the BHVN Stock Research Report.
Marinus Pharma (MRNS)
Marinus Pharmaceuticals (NASDAQ:MRNS) is developing Ganaxolone, a Gabaa modulator as a new type of treatment for epilepsy, and more recently, postpartum depression.
According to RBC Capital, ganaxolone could damage Sage Therapeutics’ (NASDAQ:SAGE) depression franchise. “MRNS’s ganaxolone could emerge as a direct competitor to SAGE’s depression franchise if it ultimately demonstrates a similar efficacy and safety profile” the firm tells investors.
Ganaxolone met the primary endpoint in a Phase II study. But — and it’s a big but — SAGE remains much further ahead of MRNS. Consequently, near-perfect execution is required by MRNS to succeed in taking substantial share from Sage, without simply competing on price. Get the MRNS Stock Research Report.
Solid Biosciences (SLDB)
That sets it up against the current market leader, Sarepta Therapeutics (NASDAQ:SRPT). Sarepta has already launched Exondys 51, the first-ever FDA-approved treatment for DMD. Plus Sarepta is also developing its own Microdystrophin gene therapy. And it’s primed for success … in the near-term at least.
For instance, RBC Capital estimates SRPT’s Microdystrophin therapy could generate more than $3 billion in yearly worldwide revenues by 2029.
But despite Sarepta’s first-mover advantage, the market is still up for grabs. Given this is a likely one-time treatment, physicians can switch providers at any time.
As RBC Capital explains: “Any follow-on treatment with a best-in-class efficacy/safety profile could potentially get used in nearly 100% of subsequently treated patients, making the space particularly important to monitor for potential disruption.” Get the SLDB Stock Research Report.
PTC Therapeutics (PTCT)
PTC Therapeutics (NASDAQ:PTCT) teamed up with Swiss multinational Roche (OTCMKTS:RHHBY) all the way back in 2011. The duo are developing a potentially groundbreaking drug for SMA, spinal muscular atrophy. This is a genetic disease caused by mutation or deletion of the SMN1 (survival of motor neuron) gene.
Right now, Biogen (NASDAQ:BIIB) is the go-to company for SMA treatment. Its Spinraza franchise had sales of $ 1.7 billion in 2018, but RBC Capital estimated it topped $2 billion in 2019 (roughly 18% of total 2019 product revenues, and a key potential future growth driver).
Although Spinraza has revolutionized SMA treatment, there are a number of limitations. For instance, patients need physician-administered injections into the spinal canal and costly upfront loading doses. What’s more, there are also three maintenance injections every year.
“Roche/PTCT’s oral splice modulator risdiplam could potentially take share from Spinraza given the more convenient route of administration without need for intrathecal injection infrastructure” says RBC Capital. In November, the FDA granted priority review status to the drug. Get the PTCT Stock Research Report.
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of over 5,000 Wall Street analysts. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.