It's hard to swim upstream. But it's not impossible to do so.
The last few days for the stock market have been ugly. Really ugly. Every major stock index dropped. Nearly every stock dropped. However, a few stocks managed to swim against the downward current. These stocks included ARMO BioSciences (NASDAQ: ARMO), Bunge (NYSE:BG), and Iovance Therapeutics (NASDAQ:IOVA). Here's how these three stocks climbed while the market cratered.
Sometimes, the timing just works out. ARMO BioSciences stock shot up by a double-digit percentage despite the overall bleakness in the stock market before giving up some of its gains. Why? The company conducted its initial public offering (IPO) on Jan. 26, 2018, just a few days before the market meltdown began.
Obviously, investors were ready to get their hands on ARMO BioSciences stock, regardless of what was going on with Wall Street. There are high expectations for ARMO's lead candidate, AM0010. The drug is a long-acting form of recombinant human Interleukin 10 (IL-10). IL-10 stimulates the activity of CD8+ T cells, white blood cells that kill cancer cells.
ARMO is evaluating AM0010 in combination with FOLFOX chemotherapy in a late-stage study targeting treatment of pancreatic cancer. The company also has several early-stage clinical studies under way for AM0010 as a single agent and in combination with other drugs targeting treatment of non-small cell lung cancer, renal cell cancer, and other solid tumors.
Bunge stock didn't jump as much as ARMO BioSciences stock did, but it still generated gains in the midst of a strong market downturn. The global agribusiness company didn't have to do anything on its own to outperform the market. Interest from a potential suitor made sure Bunge stock performed well.
Reuters reported last month that agribusiness giant Archer Daniels Midland (NYSE:ADM) had proposed an acquisition of Bunge. That story was enough to give Bunge stock a big boost that carried over into the first week of February. It definitely helped that speculation increased on Monday that ADM could soon reach an agreement to buy Bunge.
Should the ADM acquisition of Bunge finalize, it would combine two of the largest agribusiness companies in the world. ADM claims a market cap of $23 billion, while Bunge's market cap stands at over $11 billion. However, there could be some resistance to a deal from regulators as well as opposition from smaller farmers worried about the impact of ADM having a greater presence in the wheat, corn, and soybean markets.
Iovance Therapeutics stock also climbed as most other stocks plunged. In Iovance's case, the last few days were just a continuation of strong gains racked up in 2018, with the biotech stock more than doubling.
The run-up began in early January as investors eagerly awaited Iovance's pipeline update for its tumor infiltrating lymphocytes (TIL) candidate LN-145. Iovance reported results from a couple of phase 2 studies on Jan. 24, and investors' anticipation was rewarded. The stock soared after the company announced that three of eight patients with head-and-neck cancer in one study experienced a confirmed partial response (a tumor size reduction of at least 30%), and one of two evaluable patients with cervical cancer in the other study experienced a confirmed partial response.
As many clinical-stage biopharmaceutical companies do, Iovance immediately took advantage of the surge in its stock price to raise cash through a public offering. Within a few days, the company sold $172.5 million of its stock to generate capital to fund its ongoing clinical trials.
What did these three stocks have in common? They all had good news that outweighed any bad news coming from the broader market. There's nothing magical about ARMO BioSciences, Bunge, and Iovance Therapeutics beating the market, though. Each of these companies could just as easily have had things not go in their favor.
It remains to be seen if these three stocks can keep their against-the-grain momentum going. ARMO BioSciences won't report results from its late-stage study of AM0010 for another year. The potential acquisition of Bunge by ADM could be derailed. Even if not, the price tag of a deal could limit how much Bunge stock increases from this point. Iovance faces plenty of hurdles with advancing its pipeline candidates.
I don't view any of these three stocks as screaming buys right now, despite their success in the midst of a storm. But I'll keep my eyes on ARMO and Iovance to see how things unfold for these potentially promising biotechs.