Investing in biotech companies can be tricky, especially for investors who don't have a scientific background or who don't completely understand the process of bringing new drugs to the marketplace.
Fortunately, the Fool is here to help. We asked three of our top biotech analysts which company they're keeping a close eye on as we head into November, and this is what they had to say.
Brian Orelli: With the American Society of Hematology meeting happening in early December, November is a good month to catch up on drugs that treat blood cancers and other blood diseases.
We'll actually get a bit of a catalyst before the meeting: On Nov. 6, abstracts for the presentations at the meeting are released, and on Nov. 17, late-breaking abstracts for clinical trials are published.
The late-breaking submissions tend to be the most interesting, but they usually have the least amount of data since the clinical trials are often still in process. The abstracts are sometimes just placeholders, and you have to wait for the meeting to get any meaningful data.
Whether it's in the abstract or at the meeting, I'm looking forward to seeing Seattle Genetics' (SGEN) data from its Aethera trial, testing Adcetris immediately following an autologous stem cell transplantation in patients with Hodgkin lymphoma. The biotech already reported a 75% improvement in progression-free survival -- living without the disease progressing -- but the details of how the patients are responding are more important than the top-line data.
Autologous stem cell transplants are basically the last chance at a cure for patients with Hodgkin lymphoma. If patients fail the transplant, the subsequent treatments -- including Adcetris, which is currently approved for patients that failed a transplant -- can extend survival, but don't typically cure the patient. If using Adcetris directly after a transplant can increase the transplant's cure rate, use of Adcetris should go up substantially.
George Budwell: The biotech stock that has my interest this month is Gilead Sciences (GILD -1.15%). Even though shares have already risen by 52% this year, Gilead still offers tremendous value at current levels for a number of reasons.
First off, we have the company's next-generation hepatitis C treatment, Harvoni. With about 40% of patients eligible to receive the shorter treatment duration with this fixed combination pill (eight weeks compared to 12 weeks) and most patient sub-types reporting 99% functional cure rates in clinical trials, this drug looks like it has what it takes to dominate the hepatitis C market. The only serious risk to Harvoni's utter domination is if AbbVie (ABBV 0.25%) prices its hepatitis C offering in a manner that allows it to gain favor on the formulary. Even then, AbbVie's experimental treatment will still need to be deemed "clinically equivalent" in order to displace Harvoni on the formulary.
Gilead, though, has a lot more to offer than AbbVie. For example, the company is in the process of launching its new blood cancer drug Zydelig, and its HIV medicine, Stribild, has seen sales more than double in the past year. All positive signs for Gilead's future.
Todd Campbell: Avanir (NASDAQ: AVNR) already sells one commercial drug, Nuedexta, but it hopes to win FDA approval for a second treatment on Nov. 26, when the FDA is slated to issue its decision on AVP-825 as a treatment for migraines.
If Avanir wins the FDA go-ahead for AVP-825 it could win away share from oral sumatriptan tablets, which are the most commonly prescribed medicine for acute migraines. Prior to losing patent protection, sumatriptan, sold as Imitrex by GlaxoSmithKline (GSK -0.83%), had sales of more than $1 billion annually.
AVP-825 is a new low-dose formulation of sumatriptan that is taken intra-nasally, rather than swallowed. During clinical trials, AVP-825 and outperformed oral sumatriptan with AVP-825 patients reporting greater pain relief within 30 minutes than patients taking sumatriptan tablets.
The CDC estimates there are 37 million migraine sufferers in the U.S. and Avanir reports that roughly 13 million scripts are written for triptan medicines every year; about half of which are for sumatriptan. As many as 66% of migraine sufferers remain dissatisfied with their treatment options, so they may find a willing audience. Industry watchers project AVP-825's peak sales could be between $125 million and $200 million and while that wouldn't move the needle for a big drugmaker, it should go a long way toward turning Avanir profitable while also providing cash for the company's promising Alzheimer drug trials.
