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Top Biotech Stocks to Watch at ASH 2018

By Cory Renauer - Dec 1, 2018 at 7:03AM

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Investors have been waiting patiently for some important updates expected at a key medical conference.

The 60th annual meeting of the American Society of Hematologists (ASH) is a big deal for the entire biotech industry, but a couple of stocks have a lot more to gain or lose there than most. Acceleron Pharma (XLRN) and bluebird bio (BLUE 6.79%) have important partnerships with Celgene (CELG) that could shift into an even higher gear if their presentations are successful.

Wall Street analysts have predicted blockbuster sales for experimental new therapies from Acceleron and Bluebird, but we haven't seen quite enough evidence to be sure. Investigators representing these two biotechs, and countless others, will present results at ASH this year that could sway how the big banks feel about the drugs that the companies are developing. Here's what you need to look for.

A crowd of cheering healthcare professionals.

Image source: Getty Images.

Acceleron Pharma: Is the second time the charm?

Since its market debut in 2013, Acceleron has been trying to help a variety of patients with different blood disorders to produce enough healthy red blood cells. The company's first Celgene-partnered treatment, sotatercept, didn't quite hit the mark. But luspatercept looks like it can really make a difference for patients with myelodysplastic syndromes (MDS) and beta-thalassemia, conditions that lead to red blood cell (RBC) deficiencies.

When erythropoietin-stimulating agents no longer get the job done, MDS and beta-thalassemia patients must rely on inconvenient and expensive blood transfusions. These work, but they cause painful iron-overload issues that these patients need to deal with for their entire lives. Acceleron shares soared this summer after luspatercept helped patients with MDS and beta-thalassemia significantly reduce their need for transfusions during a pair of studies that investigators will present in detail at ASH this year.

During the Medalist study, MDS patients were 2.9 times more likely to go at least eight weeks without a transfusion than those given a placebo. The Believe study also produced impressive results that suggest the treatment works for a wide range of disorders. Beta-thalassemia patients have a hard time producing the hemoglobin protein that RBCs are full of, but patients treated with luspatercept were 4.8 times more likely to achieve a 33% or greater reduction in transfusion dependency than those given a placebo.

The results we've seen were for data collected in May, and investors will be looking for updates at ASH this year that suggest luspatercept could become a go-to RBC booster. If all goes well, Acceleron could look like an obvious acquisition target. Celgene is already responsible for 100% of development and commercialization costs associated with luspatercept, and if it is successfully launched, Acceleron is entitled to tiered royalty payments in the low-to-mid-20% range. Celgene owned 12.8% of Acceleron at the end of 2017, and it could make sense to buy up the rest at a premium.

Lab technician working with blood samples.

Image source: Getty Images.

Bluebird: An improved follow-up candidate?

This isn't the first time Bluebird and its collaboration partner Celgene have been top presenters at ASH. Clinical trial results from a cellular cancer therapy called bb2121 excited ASH attendees in 2017, with impressive results for multiple myeloma patients who had run out of treatment options.

This year, investors are looking for signs that a follow-up candidate from the partners called bb21217 will work as intended. During a trial with bb2121, the majority of patients treated with bb2121 survived 11.8 months or longer without any sign of their disease getting worse. That's a tough act to follow, but bb21217 could be up to the job. As of June 15, eight patients had been dosed and just seven patients had been given a one-month checkup. Investigators noted responses among six patients treated, but one patient with an especially high tumor burden experienced a life-threatening reaction.

Trying to eradicate cancer completely, without putting patients at risk, is a tricky balancing act. When investigators present updated results at ASH, investors will be looking for signs that treatment with bb21217 isn't too dangerous to outweigh its remarkable ability to destroy tumors.

Three scientists talking about a test tube.

Image source: Getty Images.

More to watch

Shares of Acceleron and Bluebird will probably see more action than most biotechs following their ASH presentations, but there will be plenty of eyes on another multiple myeloma program that could threaten bb21217 before it has a chance to get started. Johnson & Johnson (JNJ 0.42%) licensed a candidate from Legend Biotech of China last year that's aimed at the same target as bb21217.

The partnered treatment, LCAR-B38M, helped 42 out of 57 multiple myeloma patients achieve complete remission, and none experienced life-threatening side effects. One more blockbuster cancer therapy wouldn't move the needle very far for a company as large as Johnson & Johnson, but it could take the shine off Bluebird's accomplishments.

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Stocks Mentioned

bluebird bio, Inc. Stock Quote
bluebird bio, Inc.
$3.62 (6.79%) $0.23
Acceleron Pharma Stock Quote
Acceleron Pharma
Johnson & Johnson Stock Quote
Johnson & Johnson
$178.82 (0.42%) $0.74
Celgene Corporation Stock Quote
Celgene Corporation

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