Trying to get rich quick is a great way to lose a lot of money in the stock market. That said, there are some stocks that could lead to pretty big gains in the near term. Here are three favorites with upcoming catalysts that could propel their prices into the clouds.
This doesn't mean there isn't any downside risk in the coming quarters, but viewed from a long-term perspective, they're worth holding on to, even if they hit a patch of bad luck.
Celldex Therapeutics (CLDX -0.87%) is one of the busiest biotechs in its industry without a product yet to sell. It has several unique cancer therapies aimed at specific targets found on cancer cell surfaces in a myriad of clinical (i.e human) trials, which is good and bad. All its eggs aren't concentrated in a single basket, but running so many clinical studies makes its future cash flows difficult to predict.
The stock price is deeply depressed following a surprise failure with its former lead candidate earlier this year. Considering Celldex Therapeutics finished June with no long-term debt and about $208.8 million in working capital, its recent market cap of around $385 million puts a very modest price tag on an impressive pipeline buzzing with activity.
Celldex Therapeutics' current lead candidate Glemba targets a protein called gpNMB, which is found on the surface of several difficult-to-treat malignancies. It significantly improved outcomes among a small number of patients with difficult-to-treat breast cancer tumors that overexpress its target.
The company is currently enrolling a larger group of similar patients in a study that could lead to an approval. If the results are consistent with those seen previously, the stock could soar.
Celldex probably won't have the pivotal results until sometime next year, but data from another trial with Glemba in melanoma patients is expected in October. If highly positive, it could provide further encouragement for the candidate's other ongoing studies, and lift the stock in the process.
Works well with others
Celldex has an impressive pipeline, but it pales in comparison to Ionis Pharmaceuticals' (IONS -2.44%) line-up of more than a dozen drugs in mid- to late-stage clinical trials. By forging partnerships with several larger companies, Ionis has become a leader in the field of RNA-targeted drug discovery and development. One of its drugs has earned Food and Drug Administration (FDA) approval for treatment of a rare inherited form of hypercholesterolemia, and another approval for nusinersen, a drug in partnership with Biogen, could be on the way.
In August, the partners announced that nusinersen significantly improved outcomes in patients with infantile-onset spinal muscular atrophy, the leading genetic cause of infant mortality. If approved, nusinersen would become the first and only treatment option for this underserved group.
Following the clinical trial success, Biogen paid Ionis $75 million to license nusinersen, and will handle marketing applications. If they're successful, it will also use its salesforce to sell the drug. Ionis gets to sit back and collect $150 million if nusinersen earns widely expected approvals, and it will also receive a royalty percentage in the mid-teens on potential sales of the drug.
With peak annual estimates around $1.7 billion, nusinersen could deliver a steady, high-margin revenue stream to Ionis. The income would go a long way toward developing its wholly owned candidates, such as volanesorsen, making its shareholders increasingly rich in the process.
Another unmet need
Ionis isn't the only biotech focused on unmet needs. Underappreciated Portola Pharmaceuticals (PTLA) could soon earn approval for a drug that hospitals are clamoring for. AndexXa is the only antidote for a class of blood thinners known as factor Xa inhibitors in late-stage development.
Easily administered, factor Xa inhibiting tablets Xarelto from Johnson & Johnson and Eliquis from partners Pfizer and Bristol-Myers Squibb have quickly become popular alternatives to intravenous warfarin, but their use has been somewhat limited for an important reason: At present, there isn't an effective way to shut them off if a patient has an uncontrolled bleeding event or requires emergency surgery.
Portola's AndexXa has proved it can quickly reverse the effects of the new class of blood thinners in a vast majority of patients. Unfortunately, the FDA recently gave the company the dreaded complete response letter rather than the approval many had expected.
According to Portola Pharmaceuticals, the regulator wants to see more information about AndexXa's manufacturing process and data to support adding Xa inhibitors that are less popular than Xarelto and Eliquis to its prescription label. It's important to note that FDA communications aren't subject to full disclosure, so there could still be a bigger problem.
Given Portola's level of transparency over the years, and AndexXa's clinical trial results, it seems more like a rookie mistake that the company can rectify. If so, an approval for the antidote could lead to big gains in the quarters ahead.