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Let's take a quick look at three biotech stocks -- Lexicon Pharmaceuticals (NASDAQ: LXRX ) , Alimera Sciences (NASDAQ: ALIM ) , and Akebia Therapeutics (NASDAQ: AKBA ) -- which could all be lifted by positive headlines this Monday morning.
Lexicon soars on positive top-line results for LX4211
Lexicon just announced positive top-line results from its phase 2 clinical trial of LX4211, a treatment for type 1 diabetes intended to reduce mealtime insulin use and improve glycemic control. LX4211 is an oral, first-in-class dual inhibitor of sodium glucose transporters 1 and 2 (SGLT1 and SGLT2), which is designed to lower blood glucose levels.
Lexicon reported that LX4211 achieved its primary endpoint of reducing mealtime insulin use as well as several secondary endpoints, including improved glycemic control. During the placebo-controlled, double-blind study consisting of 33 patients, LX4211 reduced the total daily mealtime bolus insulin dose by 32% compared to 6% for the placebo. The drug was well tolerated, and no discontinuations due to adverse events were recorded.
LX4211 is currently being tested for both type 1 and type 2 diabetes. The trials for type 2 have advanced past a phase 2b trial, as well as a proof-of-concept trial for type 2 diabetes patients with renal impairment. Analysts expect LX4211 to generate blockbuster peak sales of $1 billion or more based on its dual mechanism (SGLT1 and SGLT2) advantage over drugs like Johnson & Johnson's (NYSE: JNJ ) Invokana and AstraZeneca's (NYSE: AZN ) Forxiga/Farxiga, which only inhibit SGLT-2.
Lexicon has no marketed products, but it has several other promising products in its pipeline, including treatments for irritable bowel syndrome, rheumatoid arthritis, and carcinoid syndrome -- all of which have advanced into mid and late-stage trials. Investors are optimistic regarding this morning's announcement about LX4211, and shares are up more than 16% this morning in pre-market trading.
Alimera Sciences announces a new PDUFA date for Iluvien
Alimera Sciences, a company which specializes in prescription ophthalmic pharmaceuticals, just announced that its resubmitted NDA (new drug application) for Iluvien has been acknowledged as received by the FDA, and that a Prescription Drug User Fee Act (PDUFA) goal date of September 26, 2014 has been established.
Iluvien is a treatment for vision impairment caused by chronic DME (diabetic macular edema) which is unresponsive to other available therapies. Alimera has been granted marketing authorizations for the drug in several European countries, and it has been commercially launched in the U.K. and Germany.
The resubmission of its NDA was in response to a complete response letter that the company received from the FDA in October 2013, which prompted the company to include a proposed label and safety update for the drug. Iluvien, which generated $1.9 million in sales in fiscal 2013, is Alimera's only marketed product.
This could only be the beginning for Alimera, however -- analysts believe that Iluvien could eventually generate peak sales of $217 million by 2019 if it launches across additional European markets and gains market approval in the U.S.
Akebia rallies on positive analyst ratings
Last but not least, Akebia Therapeutics has jumped over 16% in pre-market trading after at least three positive analyst ratings.
Morgan Stanley released a new report restating its "overweight" rating on the stock. Morgan Stanley currently has a $90 price target on the stock, indicating a potential upside of 430% from Friday's closing price. Analysts at UBS AG also shared that bullish sentiment, giving Akebia a "buy" rating with a more conservative $28 price target. Nomura Securities also gave Akebia a "buy" rating with a price target of $39.
Akebia has no marketed products, and two treatments in its pipeline -- AKB-6548 and AKB-6899. AKB-6548 is currently in two sets of trials for chronic kidney disease and a third one for anemia. AKB-6899 is currently in two sets of trials for various indications in oncology and ophthalmology.
AKB-6548's non-dialysis indication for CKD, which is currently in phase 2 trials, is Akebia's most advanced program. Akebia is expects to release Phase 2b data for AKB-6548 in the fourth quarter of 2014, followed by phase 2 data for the dialysis indication in the first quarter of 2015.
Both drugs are based on hypoxia inducible factor (HIF) technology -- a primary regulator of several major biological pathways which can control the production of red blood cells. Nomura analyst M. Ian Somaiya expects AKB-6548 to generate peak sales of $1.2 billion -- if it captures approximately 20% of the U.S. anemia market for dialysis and non-dialysis patients and gains additional value from licensing deals in Europe.
Investors should note that Akebia only went public last month. It raised $100 million from its IPO and sold 5.9 million shares at $17 per share. Although shares rallied 24% to $21 on the first day of trading, the stock has recently slumped below its IPO price. It's also important to remember that this is a speculative, clinical biotech -- so caution is appropriate when considering the stock.
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