3 Catalysts Biotech Investors Must Watch in 2014

Big money is riding on what happens with MannKind, Orexigen, and Keryx over the next few months.

Feb 18, 2014 at 6:30PM

Fortunes hang in the balance. In the next few months, some investors are going to make a lot of money. Unfortunately, some will also lose a bundle.

Plenty of major decisions loom large for biotech stocks in 2014. Which should investors watch most closely? Here are three impending catalysts to definitely mark on your calendars.

1. Anxious anticipation for Afrezza
To say that MannKind (NASDAQ:MNKD) shareholders anxiously await the U.S. Food and Drug Administration decision for Afrezza -- scheduled no later than April 15 -- might qualify as the biotech understatement of the year. It's been a long time coming for the inhaled insulin product.

MannKind first attempted to win approval with submission of a New Drug Application, or NDA, for Afrezza back in 2009. That effort failed in March 2010 with the FDA requesting more information, particularly about how the original inhaler used in clinical trials compared with the inhaler included on the NDA. Another thumbs-down followed in January 2011.

What are MannKind's chances this time around? I'd say they're pretty good. The phase 3 results for Afrezza in treating both type 1 and type 2 diabetes were solid. While anything can (and sometimes does) happen with FDA decisions, my prediction is that the third time will prove to be the charm for MannKind.

2. Catch-up catalyst for Contrave
It won't be the third try for Orexigen Therapeutics (NASDAQ:OREX) to secure approval for Contrave, but it won't be the first, either. The FDA turned down the weight-loss drug in 2011 because of potential cardiovascular concerns. Orexigen needed to undergo a major multi-year study to address those issues. 

In the meantime, a couple of competitors beat Orexigen to market. Arena (NASDAQ:ARNA) gained approval for Belviq in June 2012. Vivus (NASDAQ:VVUS) wasn't far behind, with its obesity drug Qsymia getting the green light from the FDA the following month. However, Vivus actually emerged as the first to market while Arena waited on U.S. Drug Enforcement Administration scheduling for Belviq. 

The FDA's next decision about Contrave comes on or before June 10. There don't appear to be any significant reasons for concern over yet another rejection. Barring an unforeseen roadblock, expect Orexigen to enter the fray against Arena and Vivus in just a few months. 

3. Zoom or zap for Zerenex
Keryx Biopharmaceuticals (NASDAQ:KERX) gets its first shot at FDA approval for Zerenex by June 7. The market clearly expects the chronic kidney disease, or CKD, drug to receive the green light: Keryx's shares have more than quintupled since phase 3 results were announced in early 2013.

Could investors be too enthusiastic about Zerenex's chances? Maybe -- but I don't think so. The clinical results from Keryx's late-stage study showed that Zerenex significantly reduced the phosphorus levels of dialysis patients with hyperphosphatemia, an elevated level of phosphates in the blood associated with end-stage renal disease, and presented no serious safety concerns. 

The upcoming FDA decision actually isn't the most important one for Keryx, though. The biotech announced positive mid-stage results in November for Zerenex in treating non-dialysis dependent CKD. Assuming regulatory approval can be ultimately obtained for this indication, Keryx could have a near-blockbuster drug on its hands.

Most prodigious pop?
A positive decision by the FDA should propel any of these three biotech stocks to higher ground. I suspect Keryx might experience the biggest pop, though.

No one will be surprised if Afrezza gains approval at long last. The bigger question for MannKind, though, is whether a strong partner can be found for commercialization of the inhaled insulin. Announcement of a partner would provide an even bigger catalyst for the plucky biotech, in my view.

Likewise, most observers probably expect Contrave to sail through the FDA's process. Orexigen, though, will have to prove that it can achieve success more dramatically and more quickly than its rivals Arena and Vivus. I think it can potentially do so, but only time will tell for sure.

For Keryx, there shouldn't be any big asterisks with a positive regulatory decision. I expect approval for the dialysis CKD indication will whet investors' appetites for the non-dialysis indication. One of the most important drivers for a stock is anticipation of the next big positive development. Keryx shareholders should view the next few months as a potential prelude to even greater heights. 

Another awesome stock you must watch this year
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information