It's a wrap. The annual American Society of Clinical Oncology (ASCO) conference has come to a close and that's got us wondering which companies deserve a gold star and which don't. The Motley Fool's Kristine Harjes and Todd Campbell weigh in on why Immunomedics (NASDAQ:IMMU) may have been ASCO's biggest loser and CAR-T drug developers Juno Therapeutics (NASDAQ:JUNO) and Kite Pharma (NASDAQ: KITE) its biggest winners. The two industry watchers also discuss AbbVie Inc.'s (NYSE:ABBV) Rova-T and whether the data AbbVie presented at ASCO last weekend justifies the $5.8 billion it paid to get its hands on that drug.

And if that isn't reason enough to tune into this week's show, Harjes and Campbell also offer up their thoughts on Biogen Inc.'s (NASDAQ:BIIB) recent clinical trial failure and they debate whether investors should be buyers. See who makes the most compelling argument on this edition of The Motley Fool's Industry Focus: Healthcare podcast.

A full transcript follows the video.

This podcast was recorded on June 8, 2016. 

Kristine Harjes: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day. It is Wednesday, June 8th, 2016. We're covering healthcare news from ASCO, which was a huge cancer research conference that happened last week. We'll touch on the big data release from Biogen that sent the stock down almost 13% yesterday. I'm Kristine Harjes and I've got Todd Campbell on the line. He is one of our Motley Fool healthcare writers. What's going on, Todd?

Todd Campbell: Hi, Kristine. I don't know if it's happening for you or for listeners, but I feel like it's raining tree pollen right now.

Harjes: My gosh. Yesterday, I was sharing an Uber with a girl who was just sneezing the entire ride down. I wasn't affected, fortunately, but I guess it's pretty bad here in Alexandria as well.

Campbell: Maybe we should do a show coming up on allergy drugs soon.

Harjes: Sure. Yeah. It's healthcare. We're allowed to do that. When you talk about allergen, that's Allergan. It's basically the same, right?

Campbell: There you go.

Harjes: Anyhow, our first topic of the day, as I mentioned, is ASCO, which was the American Society of Clinical Oncology. They had their really important meeting where a lot of drug developers will present data and other interesting tidbits. It was held in Chicago.

You highlighted for me a loser and a couple of winners. We're talking before the show. Let's take the bad news first. That's generally my preference. You called out Immunomedics as a loser. Why?

Campbell: This got to be the strangest thing I've ever seen in years of following healthcare out of ASCO. Immunomedics is a small cap company that's working on cancer drugs, right? Its shares had taken off earlier this year after ASCO had granted approval for it to make a presentation, an oral presentation on one of its drugs that treats triple-negative breast cancer. The presentation was supposed to go off on Friday. But on Thursday night, ASCO sent management a note saying, "Sorry. We're not going to let you present after all."

Harjes: That seems like it came pretty last minute. Did they not know going into it that they're going to say this?

Campbell: Well, what's weird about this, and I think that a lot of investors sold off shares on Friday not really fully understanding what ASCO was saying. What's interesting about this is that ASCO wasn't pulling the presentation because of, say, it didn't believe the efficacy or the validity of what Immunomedics was going to say. Instead, it was because of a, we'll call it, technical formality. In that at ASCO, if you're going to present, we have very strict rules on embargoing information. Apparently, Immunomedics management outlined or detailed the information that it was scheduled to present at an industry conference in April that violated those embargo rules and, thus, they got yanked.

Harjes: Interestingly, the results were actually not that great that the company did eventually present. The stock was down 14% on Friday just due to this formality. Then later, you had fairly disappointing results and it went down even further. The fact that many people dropped out due to what's essentially just an asterisk on the rules signals to me that ASCO is used by a lot of short-term traders as this big catalyst event where you bid up shares beforehand hoping for a big news. Then you'll profit on the news. That's just not very Foolish to me.

Campbell: No. If this teaches investors or reminds investors a valuable lesson, I think this is saying more about short-term trading than it's saying about anything else, the quality of the drug, or investing in biotech, or anything. As is usually the case when it comes to investing, buy the rumor, sell the news. Well, people bought ahead of the potential for a post-ASCO pop. Of course with no ASCO presentation, there was no pop. They bailed and went on to look for other ideas.

That being said, I don't think that this is necessarily a stock that people want to bargain hunt. It's got a negative book value. It's got a little bit of cash, but it's got more debt than it has cash. It's got a drug that's intriguing that it looks like it works pretty well in pre-treated patients with triple-negative breast cancer, but it's still uncertain when they could file and if the FDA would accept that filing earlier, not when it could eventually even reach the market, if it does.

Harjes: Enough of the loser, one of potentially many losers from this conference, and maybe onto some winners. It seems like the CAR-T developers were, in general, taking victory laps.

Campbell: We haven't talked about CAR-T lately on the show. We talked about it a bunch of...

Harjes: Let's remind the listeners what it is. Good idea.

Campbell: Yeah, we talked a lot about it last year. Just to give a quick 10-second elevator pitch on it, what you're talking about is a type of cancer drug that reenergizes or supercharges the immune system to better find and destroy cancer or the cancer cells. It does that by removing the T-cells from the patients' bodies, reengineering to be able to find particular proteins that cells exhibit and then reintroducing those cells back into the patient's body, setting those T-cells loose to go and find and kill those cancer cells. It's a very, very interesting and intriguing proposition. The data that came out of ASCO certainly adds to the support to the concept that CAR-Ts could be a game-changing way of treating blood cancer specifically.

Harjes: Did any particular companies stand out to you?

Campbell: The two companies that I think are the ones that are investable or should be considered by investors are Juno Therapeutics and Kite Pharma. Those two companies are both working on programs that address significant unmet need in things like acute lymphoblastic leukemia, for example. Juno, which has actually teamed up with Celgene, had a bunch of different data come out of ASCO on JCAR015, JCAR014, JCAR017. I think that the thing that investors need to know is that the news that came out or what they released at ASCO was that these drugs work incredibly well versus what's on the market today. JCAR015 had complete responses in up to 91% of patients that were dosed. JCAR014 had response at 100% of patients with relapsing acute lymphoblastic leukemia responded to that treatment. JCAR017, 93% of pediatric and young adult patients with ALL saw a complete remission. Just really pretty outstanding results in these patient populations.

Harjes: Yeah, these numbers were pretty amazing, very, very encouraging. The thing to remember for investors is that these are still fairly early stage companies. Let's say you want to take a highlight from ASCO of a larger company; something that stood out to me was AbbVie. We finally got a little bit of information on a purchase that AbbVie made in April of this past year for $5.8 billion. They bought a company called Stemcentrx, essentially for their lead candidate, which is called Rova-T. We finally got some more information about this drug.

Campbell: A lot of investors were shaking their heads. Who's Stemcentrx and why are they paying $5.8 billion for it? We got a little bit more insight into that at ASCO, absolutely. Rova-T is under development as a treatment for small cell lung cancer. Small cell lung cancer is very hard to treat. It affects thousands of patients. Thousands of patients, unfortunately, pass away every year because of it.

In trials, Rova-T does a better job at shrinking tumor sizes than what many people may otherwise have seen in the past. Specifically, they took a look at a patient population of about 60 people. Rova-T targets a particular protein called DLL3 that's expressed on small cell lung cancer tumors. Of those people, there were 26 patients that had very high levels of expression of that DLL3. 40% roughly of those patients responded to this therapy. 89% of those patients had stable disease. That's really, really impressive given the poor prognosis for small cell lung cancer.

Harjes: I just like this drug's story. It's an antibody conjugate which means it's double-sided. It works like a trojan horse. The protein binds to this DLL3, and it's invited inside of the tumor cell, the cancerous cells. Then its inside, snuck in and it releases the other component of the drug, which is an extremely potent chemotherapy drug. That's a really good story. We've warned on the show in the past not to get too, too excited about stories. Todd, you might disagree with me here, but I actually didn't think that the data seemed that promising. It didn't really look like they provided results that were that much better than the current standard of care.

There are some positive still here. It has an orphan drug designation which means that if it gets approved, AbbVie can be reimbursed for a huge chunk of the expenses incurred in the development. It seems to me like small cell lung cancer is not going to be the indication that makes up for the whole $5.8 billion purchase. It leads me wondering, are there other cancer types that over express DLL3? Could AbbVie take this drug and target those? If so, then this might have been an incredibly smart purchase. For now, I'm hesitant about this decision.

Campbell: Well, the answer is yes. They think that they can use this drug in various tumors that also express DLL3. That has AbbVie's management thinking that this drug could, again, conceivably, management is always bullish, generate $5 billion in annual sales someday. That's a pretty pie in the sky forecast.

Harjes: If that's true, then that's a great price, the 5.8.

Campbell: Yeah. You take a risk. When you buy drugs that are in mid-stage trials, you take a risk, right? AbbVie is taking a risk, right? Could Rova-T fail, fall flat on its face, end up being a dud? Absolutely. Could it also become a very large and important cancer fighting drug? Absolutely. AbbVie's management had to weigh those two things and figure out how derisk is this program and what's the likelihood of this thing succeeding?

I think that what you may have seen out of ASCO's, people were looking for this drug to be a silver bullet. They're a little bit disappointment that maybe it's not as magical as maybe they had hoped to have seen. This is still, I think, solid data. Registrational study, enabling study is slated to begin later this year. Theoretically, data will read out on that study next year. If it's good, then the company can file for approval. If it's not, then all bets are off.

Harjes: Got you. Speaking of high-risk, high-reward propositions, I want to turn to the last topic of the day which is Biogen as a general stock within the healthcare space is not your typical high-risk, high-reward stock, but they have a couple of trials going on that are fairly risky. They're not obvious wins. There is a lot of hope tied to this one particular trial -- that was known as the SYNERGY trial -- that was in multiple sclerosis and, unfortunately, had pretty bad news delivered yesterday. That the drug, anti-LINGO, failed to meet both primary and secondary end points.

Campbell: Biogen is a biotech goliath. They get tons of financial firepower. That financial firepower is being used to take a couple of moonshots. One of those moonshots was this drug that you just mentioned, anti-LINGO-1. They were studying Anti-LINGO-1 as a potential first ever drug that could be used to reverse the effects of multiple sclerosis. If you follow Biogen at all, and I'm sure some of our listeners have, they are already a giant in multiple sclerosis treatment. However, all of their therapies simply delayed disease progression. They don't reverse the course of this disease. Unfortunately, the trial result showed that anti-LINGO-1 wasn't effective, and it actually didn't even slow the progression of the disease. It's kind of a lose-lose in that regard.

Harjes: This was extremely disappointing because the drug was hoped to be the first ever drug to be able to actually repair the damaged myelin sheath that is involved with this disease so to actually be able to reverse it.

Campbell: Right. The myelin sheath that basically covers part of the cell in the central nervous system that allows for the fast transmission of signals. Once it gets damaged by... It's usually damaged by inflammation or immune system reaction. That signaling gets thrown out of kilter, if you will. That causes the symptoms of the disease. If you could repair the myelin sheath, then theoretically you could restore that fast signaling. Unfortunately, that didn't happen in this trial.

Harjes: That being said, Biogen is still the market share leader in what is roughly a $17 billion market for multiple sclerosis. Why is that so hard to say? MS treatments. The company was down 12.7% yesterday, which for a stock that huge, that's a really, really large tank. The question that I have for you, Todd, we'll wrap up the show with it, going forward, is Biogen a buy, a sell or a hold?

Campbell: It's a buy. It's a buy. Listen, this is a biotech goliath that's on the same level as owning a Celgene or a Gilead. It needs to be a core holding in biotechnology portfolios. They still got tons of drugs in the pipeline. They're doing some really interesting research on Alzheimer's disease. They're fairly well-insulated from competition in multiple sclerosis. They're growing their top and the bottom line still.

I think that this is a stock that people tuck in. They buy it on sale and they recognize that, yes, trials fail. Some trials will succeed. On balance, Biogen has, I guess, the financial firepower to get it through those stumbles like it endured this past week.

Harjes: I have to say I don't disagree with you much, but I actually am not quite as bullish here. It seems to me like they might be losing grip on the MS market a little bit. You have new therapies coming to market. You've got Novartis with Gilenya. Biogen right now, it seems to be relying pretty heavily on these moonshots. They had anti-LINGO-1 and we just discussed that whole story and how disappointing that was. They have another Alzheimer's candidate that is also as much, if not more of a moonshot. It could be huge. To me, when I'm looking at buying a big relatively safe biotech, I don't want to buy it because of small chance moonshots.

Campbell: Well, I'll give you that. Alzheimer's disease especially is extremely hard to treat. There are no cures. The failure rate in clinical trial is about 99%.

Harjes: Yet, I still think a lot of the valuation of this company is tied to hopes for that drug.

Campbell: I don't know. You're only paying 12 or 13 times earnings to buy this company right now. I think that they'll be OK. I think that they'll be able to... Even if their pipeline doesn't generate out, the multibillion dollar blockbusters, I think they still have plenty of interesting opportunities. I also like the idea of owning it to get the potential for the spin-off of its hemophilia drugs later this year. That's a whole other show.

Harjes: Yeah. We could probably do an entire show about Biogen. We'll add it to the idea's list. I guess, for now, we'll agree to disagree.

Listeners, dig in to the story, read up. We've got plenty of great articles on, not only about Biogen, but also about the different ASCO data readouts and news on every company that we've discussed today as well as a handful of others. Have fun reading up. Todd, thanks so much for your thoughts today and helping me get this news out there.

As always, people on the program may have interest in the stocks that they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. For Todd Campbell, I'm Kristine Harjes. Thanks for listening and Fool on!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.