5 Stocks Forging the Future of Breast Cancer Care

Pharmacotherapies for breast cancer are undergoing an innovation boom. Which biotechs offer the most compelling investment opportunities in this space?

Apr 8, 2014 at 9:30AM

Breast cancer is the second leading cause of cancer deaths among women, falling second only to lung cancer. Fortunately, the mortality rate has steadily declined since 1989, partly because of earlier detection through regular screenings and improved treatment options. Pharmaceuticals, in particular, took a major leap forward with the approval of Roche's (NASDAQOTH:RHHBY) monoclonal antibody Herceptin in 1998 for metastatic HER2-positive breast cancer. In many ways, Herceptin's approval marked the beginning of the age of personalized medicine and a focus on more targeted cancer therapies with fewer side effects. Since then, biotechs far and wide have raced to develop the next generation of breast cancer treatments, and this herculean task is only now beginning to bear fruit, nearly 16 years after Herceptin's initial approval by the Food and Drug Administration.

Because the breast cancer drug market is expected to grow to $24 billion by 2016, these next-generation therapies could provide some compelling investment opportunities. With that in mind, let's take a closer look at some of the most intriguing new drugs and clinical candidates being developed by Celldex Therapeutics (NASDAQ:CLDX), Eli Lilly (NYSE:LLY), Pfizer (NYSE:PFE), Novartis AG (NYSE:NVS), and Roche.

Monoclonal antibodies
Spurred by their blockbuster success with Herceptin, Roche and its subsidiary Genentech have worked diligently to bring other monoclonal antibodies to bear in the fight against breast cancer, culminating in the FDA approval of Perjeta in 2012. Perjeta is a HER2 dimerization inhibitor used in conjunction with Herceptin and docetaxel for the treatment of metastatic HER2-positive breast cancer and as a neoadjuvant treatment for early stage breast cancer. Analysts believe Perjeta could see peak sales of an eye-popping $8.5 billion by 2020 if the drug can gain a handful of additional approvals. Per its current approvals, Perjeta is still expected to be a blockbuster in its own right, with peak sales forecast by some to hit as high as $2.5 billion.


Source: www.onclive.com.

Antibody-drug conjugates
Taking the targeted therapeutic approach one step further, antibody-drug conjugates combine an antibody with a potent cytotoxin through "linker technology." Although the broad commercialization of ADC's has been hampered by toxicity issues, the FDA approved Roche's Kadcyla last year as a treatment for late-stage breast cancer patients that have stopped responding to Herceptin and chemotherapy. Kadcyla is Herceptin combined with the cytotoxin DM1 via linker technology and used as a treatment of last resort for late-stage breast cancer. Despite the drug's problematic side effect profile, clinical studies showed that patients receiving Kadcyla lived significant longer than patients on standard therapy.  What's particularly interesting from an investment standpoint is that Kadcyla could achieve peak sales as high as between $2 billion and $5 billion, even though it's indicated for a relatively small patient population.  

Celldex Therapeutics is also developing an intriguing ADC called CDX-011 for triple-negative breast cancer. In a mid-stage study, some patients receiving the drug had their tumors shrink and survived nearly twice as long as patients on standard therapies. Celldex is expected to open further clinical sites in the U.S., Canada, and Australia this year, with the study possibly concluding in 2016. 

CDK 4/6 dual inhibitors
Small molecule drugs aimed at inhibiting CDK 4/6 to stop the growth of cancer cells have also seen a flurry of clinical activity in recent years. Although no CDK inhibitors have been approved for the treatment of cancer yet, Pfizer, Eli Lilly, and Novartis all have CDK inhibitors under development. Among these companies, Pfizer appears to be the closest to a regulatory approval with its drug palbociclib. Palbociclib is presently being studied as a potential treatment for advanced breast cancer, with Pfizer reportedly considering accelerated approval for the drug based on mid-stage results. At the American Association for Cancer Research meeting in San Diego last weekend, Pfizer said that progression-free survival for patients receiving the drug nearly doubled to 20.2 months compared to patients on standard therapy, but the study has yet to show a clinical benefit in terms of overall survival. 

Novartis also has a rival CDK inhibitor in a late-stage trial called LEE011 and Eli Lilly has an early-stage candidate known as LY2835219. Analysts believe the first FDA approved CDK inhibitor for breast cancer could see peak sales of anywhere between $1 billion to $9 billion, depending upon the effectiveness and safety profile of the drug. 

Foolish wrap-up
The economics of breast cancer pharmacotherapy are staggering, with multiple megablockbusters already on the market. Even so, the diversity of breast cancer types lacking approved therapies, other than cytotoxins, shows there is still a large unmet medical need. And while Pfizer's palbociclib could be the next megablockbuster breast cancer drug to help fill this void, there will certainly be others in the near term, evinced by Celldex's and Novartis' rapid clinical development of their respective drugs. So, you may want to dig deeper into these leaders in the race to develop the next generation of breast cancer medications. 

Invest in the next wave of health-care innovation
The Economist compares this disruptive invention to the steam engine and the printing press. Business Insider says it's "the next trillion-dollar industry." And the technology  behind is poised to set off one of the most remarkable health-care revolutions in decades. The Motley Fool's exclusive research presentation dives into this technology's true potential and its ability to make life-changing medical solutions never thought possible.  To learn how you can invest in this unbelievable new technology, click here now to see our free report.

George Budwell has no position in any stocks mentioned, and neither does The Motley Fool. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers