Investing in biotech stocks with promising pipelines has to be the most exciting area of the market. A successful drug approval can not only unveil a blockbuster treatment worth billions of dollars, but it can literally change people’s lives for the better.
Yet the biotech landscape is also littered with failure. Drugs that previously held so much promise end up proving worthless. Biotech stocks that soared on the potential for approval end up crashing and burning with investors losing their money.
That’s why you must perform extreme due diligence before investing in biotech stocks with seemingly promising pipelines. The three companies below are excellent places to start. They are all established biotechs with approved therapies on the market. Yet, they also have robust pipelines possessing at least one potential blockbuster, and in some cases, several.
BioNTech (BNTX)
BioNTech (NASDAQ:BNTX) exploded into the public consciousness because of its Covid-19 vaccine, produced in partnership with Pfizer (NYSE:PFE). The biotech still derives virtually all of its revenue from the therapeutic. Yet, sales are imploding because far fewer people see the value in obtaining the vaccine.
Year-to-date (YTD), vaccine revenue plunged 86% to $196 million from $1.4 billion last year. Total six-month revenue was $316 million with the balance coming from a pandemic-related preparedness contract with the German government. This highlights the reason that BioNTech’s pipeline is so important. It likely won’t ever produce another cash cow like Comirnaty. But the biotech’s promising pipeline could significantly boost sales.
While the vaccine was BioNTech’s claim to fame, the biotech has over dozen of cancer treatments undergoing clinical trials. ONC-392, which is being developed in partnership with privately held OncoC4, is in Phase 3 trials for the treatment of solid tumors while also in mid-stage trials for ovarian cancer. BNT323, pursued with Duality Biologics, is in late-stage trials for breast cancer and Phase 2 trials for multiple solid tumors.
Positive results from either of these therapies could see BNTX stock take off.
Bristol-Myers Squibb (BMY)
Pharmaceutical giant Bristol-Myers Squibb (NYSE:BMY) has a large portfolio of drugs on the market, with each generating billions of dollars in sales. Most notable among them are Eliquis for treating blood clots and to prevent strokes, and Opdivo, an oncology therapy.
But it has more than a dozen formulations in its pipeline, many with Opdivo paired with another drug for cancer treatment. However, its most advanced therapy is KarXT for the treatment of schizophrenia. The Food & Drug Administration (FDA) is due to issue a recommendation next month.
KarXT is a twice-daily dosage of xanomeline and trospium. If approved, it would be the first new treatment for schizophrenia to come to market in decades. The market for schizophrenia drugs is estimated to be $7.1 billion by 2028. Furthermore, analysts estimate KarXT could achieve peak sales of $10 billion.
Bristol-Myers Squibb has a dozen drugs in its growth portfolio (and another half dozen or so in its legacy one). Second quarter revenues generated $12.2 billion, a 9% increase over last year. The pharma acquired KarXT last December when it bought Karuna Therapeutics for $14 billion. If it gets the green light, look for BMY stock, which is down 22% over the past year, to rocket higher.
Regeneron Pharmaceuticals (REGN)
Similarly situated is Regeneron Pharmaceuticals (NASDAQ:REGN), which had $3.5 billion in second-quarter sales, a 12% year-over-year increase. Its biggest drug on the market is Eylea, an eye disease therapy marketed with Swiss pharma Bayer (OTCMKTS:BAYRY), which accounted for 43%, or $1.5 billion, of total sales. Product sales were up 2% from last year.
Regeneron Pharmaceuticals has a large number of treatments in mid- and late-stage trials. One of the most promising is one it is partnering with Intellia Therapeutics (NASDAQ:NTLA), a clinical-stage gene editing company focused on revolutionizing medicine with CRISPR-based therapies.
NTLA-2001 is for the treatment of transthyretin amyloidosis with cardiomyopathy (ATTR-CM), a progressive and deadly form of heart disease.
Right now, Pfizer’s tafamidis, which it markets as Vyndaqel, Vyndamax and Vynmac, is the primary treatment for ATTR-CM, and it generated over $3.3 billion in sales last year. Approval of NTLA-2001 could take a large swath of those revenues. While Regeneron would only be entitled to 25% of the profits with Intellia receiving the rest, it would still be a major growth drug for the biotech.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
