What do platelets, wounds, and blindness have in common? Treatments for all three helped these stocks climb 26% last week.
Do any of these small-cap biotechs have what it takes to keep climbing? Here's what you need to know.
|Company (Symbol)||Gain During the Week Ended June 28, 2019||Gain in the Year to Date||Market Cap|
|Dova Pharmaceuticals (DOVA)||58%||86%||$398 million|
|Krystal Biotech (KRYS 0.38%)||38%||93%||$579 million|
MeiraGTx Holdings (MGTX -1.93%)
1. Dova Pharmaceuticals: platelet power
Shares of Dova Pharmaceuticals jumped last week, thanks to an FDA approval that will boost sales of the company's platelet-bolstering therapy, Doptelet. This thrombopoietin receptor agonist has already earned its first FDA approval, but the initial launch was so disappointing that the company appointed a new CEO last year.
Doptelet's first indication was limited to chronic liver disease patients scheduled for surgery that could lead to uncontrollable bleeding. The recent label expansion brings Doptelet to people with treatment-resistant chronic immune thrombocytopenia (ITP), a bleeding disorder that affects roughly 60,000 Americans.
While the ITP community will appreciate a new treatment option, Novartis (NVS -2.05%) markets a drug from the same class that will be hard to compete with. First-quarter sales of Promacta rose 24% compared with last year and are on pace to top $1.2 billion in 2019.
2. Krystal Biotech: topical gene therapy
The FDA doesn't play favorites, but Krystal's topical gene therapy clearly has the regulator's attention. Krystal stock popped like a champagne cork after the agency designated its lead candidate, KB103, a regenerative medicine advanced therapy (RMAT). The RMAT designation will allow the company to engage more frequently with the FDA while planning a larger phase 3 study.
Results from a phase 2 study released last week were eye-opening, despite involving just a few patients with a rare skin disorder. People born with generalized recessive dystrophic epidermolysis bullosa (RDEB) can't produce collagen type 7 on their own, which leads to recurring wounds that don't heal for months at a time, and some never close completely.
Investigators treated three wounds on each patient, one with a placebo and the other two with KB103, a topical gene therapy that inserts a functional collagen 7 gene. The experimental treatment clearly spurred production of the collagen the patients were missing because five out of six wounds treated with KB103 closed completely and zero placebo-treated wounds fully closed during the 90-day observation period. The only treated wound that didn't close got two-fifths of the way shut at the 90-day checkup after being open for four solid years.
On the safety side, there weren't any serious adverse events during the 90-day study, and no drug-related side effects among the three patients treated. That's a terrific first look, but the FDA's going to need to see results from a larger study that will probably start before the end of the year.
3. MeiraGTx Holdings: Moving fast
MeiraGTx made its stock market debut in June 2018, and this January, Johnson & Johnson (JNJ 0.12%) gave the clinical-stage start-up $100 million up front to collaborate on gene therapies for the treatment of genetic causes of blindness. The stock has been soaring since the clinical-stage start-up reported posted positive top-line data from its first J&J-partnered candidate, and it could have much further to climb.
After a single injection of AAV-RPE65 in one eye, the time to navigate a maze with the treated eye open was significantly shorter than when running with an untreated eye open. Patients' retinal sensitivity also improved significantly from one eye to another, and it's just a matter of time before the company and its mighty collaboration partner meet with the FDA to plot the shortest path to approval.
More fuel to keep climbing?
If Dopetelet can gain popularity among treatment-resistant ITP patients who can't use Promacta, Dova shares could more than double before the year's over. Before diving in, though, be aware that Novartis isn't going to make it easy for Dova. There's a good chance that Dova will struggle to make a dent in the ITP space and drag your portfolio down in the process.
Despite big surges already this year, Krystal Biotech and MeiraGTx probably have a better chance to deliver market-beating gains than Dova and their chances look pretty good. Krystal's topical collagen type 7 booster could be on its way to a speedy approval for an underserved population. There are probably fewer than 200 patients with generalized RDEB in the U.S., but Krystal is developing KB103 for the broad DEB population, which could boost its addressable patient population up to a few thousand down the line.
Although AAV-RPE65 is aimed at the same tiny patient population as a competing gene therapy, investors will be watching MeiraGTx for signs that Johnson & Johnson wants to increase its ownership stake in the gene therapy developer and help expand its pipeline.