So far, 2019 has been a banner year for portfolios stuffed with these three biotech stock rockets. All three have already doubled their shareholders' money this year, and they could have a lot more to offer in the quarters ahead.
Past performance doesn't guarantee future gains, but the clinical trial results these companies have reported recently all point in the right direction. Here's what to look out for during the next chapter of each one's growth story.
| Company (Symbol) | Gain So Far This Year | Market Cap |
|---|---|---|
| Arrowhead Pharmaceuticals (ARWR 1.98%) | 118% | $2.6 billion |
| Iovance Biotherapeutics (IOVA +3.38%) | 116% | $2.4 billion |
| Array BioPharma (ARRY +0.00%) | 103% | $6.4 billion |
Data source: Yahoo! Finance.
1. Arrowhead Pharmaceuticals: A burgeoning pipeline
A flurry of activity inspired Arrowhead investors to push the biotech stock through the roof in the first half of 2019. During the first quarter alone, the company began dosing patients with two new drug candidates. In April, Arrowhead received clearance to begin a pivotal trial for ARO-AAT, a potential new treatment for a rare inherited liver disorder.
Arrowhead's star kept rising in April when the company presented some compelling results from a human proof-of-concept study with an experimental hepatitis B virus (HBV) treatment named ARO-HBV. The little biotech's big collaboration partner, Johnson & Johnson (JNJ +0.64%), was so impressed that the pharma giant offered to pay for development and commercialization expenses related to ARO-HBV, which is now known as JNJ-3989.
There are over 200 million people living with HBV, and there aren't any highly effective antiviral drugs available to tackle the virus once someone already has it. It progresses slowly, but HBV still claims the lives of around 900,000 people each year.
Arrowhead has been treating small groups at a time with increasing doses, and so far it's been well tolerated. Results from the group treated with a higher dose of JNJ-3989 are expected in the second half and could send the stock soaring further.
Image source: Getty Images.
2. Iovance Biotherapeutics: Tumor infiltration
Iovance Therapeutics hasn't gotten the attention it deserves, because its lead candidate is an infusion of immune cells that haven't been altered, just replicated. Iovance harvests a tiny sample of tumor-infiltrating lymphocytes (TILs) from a patient's own tumor, then coaxes those TILs to reproduce until there are billions ready to attack tumors all at once. Then it sends them back to the front line.
We know that tumors are good at shutting down attacks from the immune system when they come on at the usual pace. Iovance is showing us what happens when tumors are bombarded, and results released in May suggest solid tumors might actually be susceptible to a D-Day scale invasion.
We've learned the hard way that complex cancer treatments aren't necessarily better than simple solutions. If multiplying TILs taken from a tumor really can improve patients' chances of long-term survival, this stock could continue climbing for years to come.
3. Array BioPharma: Sorry, Novartis
Around five years ago, Novartis (NVS +0.61%) returned two experimental cancer drugs that the Swiss pharmaceutical behemoth had previously licensed from Array BioPharma. About a year ago, Braftovi plus Mektovi earned approval from the Food and Drug Administration to treat advanced-stage melanoma.
More recently, the company announced results of a study with colorectal cancer (CRC) patients that showed adding Braftovi and Mektovi to Erbitux reduced patients' risk of death by 48% compared to Erbitux plus standard chemotherapy. Array plans on sending an application to the FDA before the end of the year, which could give sales of the combination a boost.
Image source: Getty Images.
Braftovi and Mektovi are on pace to add more than $150 million to Array's top line this year, and a label expansion to treat CRC could push annual sales to $500 million in a just a few short years.
Braftovi and Mektovi aren't the only commercial-stage cancer drugs spawned by Array's drug-discovery engine. Vitrakvi, now marketed by Bayer, recently became the first drug approved to treat any kind of tumor with a specific genetic mutation.
Array is eligible for a royalty percentage from sales of Vitrakvi, and there are at least five new cancer drug candidates in late-stage clinical trials sponsored by collaboration partners. The stock isn't cheap at recent prices, but Array's extremely productive drug-discovery engine will probably keep pushing it higher over the long run.
The trouble with chasing rockets
There are good reasons to expect more gains ahead, but it's important to remember these three stocks now have twice as far to fall if something unexpected happens. As a commercial-stage company with multiple revenue streams, Array is a little safer than Arrowhead and Iovance, but all three of these stocks belong in a well-diversified portfolio.
