When big pharmas go shopping, you usually won't find them sifting through the clearance racks for bargains. For the most part, the large drugmakers would rather pay extra for a proven winner than buy an on-sale biotech looking to recover.

Take Array BioPharma, which had more than doubled year to date through the middle of last month thanks to getting some added marketing muscle for its partnered drugs and positive clinical trial data for its own drugs. Pfizer saw the biotech's potential, deciding to take out Array for a 63% premium, resulting in a 225% return for the first half of the year.

Here are three more biotechs that have earned doubles -- or more -- during the first half of the year, potentially on their way to becoming acquisition targets.


First-Half 2019 Return

Adverum Biotechnologies (NASDAQ:ADVM)


Voyager Therapeutics (NASDAQ:VYGR)




Data source: YCharts.

1. Adverum Biotechnologies

Adverum only has one drug in clinical trials, but ADVM-022, a gene therapy for an eye disease called wet age-related macular degeneration, is off to a good start.

In late April, the biotech said doctors were able to treat the second eye of patients who had previously been treated with ADVM-022, a good sign that patients aren't developing tolerance to the treatment.

A few weeks later, the Food and Drug Administration decided to lift a hold that was preventing Adverum from escalating to a higher dose. But instead of testing ADVM-022 at a higher dose, the company said the data from the first dose was so good that it plans to test a lower dose to see if it'll work as well.

It's a pretty rare sight when the play-it-safe initial dose works well enough that companies test a lower dose.

2. Voyager Therapeutics

Voyager established a pair of development deals that have helped propel the biotech's stock higher.

In January, Voyager licensed the rights to its gene therapy programs VY-AADC for Parkinson's disease, VY-FXN01 for Friedreich's ataxia and two additional programs to be determined later to Neurocrine Biosciences (NASDAQ:NBIX) for $165 million up front, including a $50 million equity investment, and the potential for up to $1.7 billion in development, regulatory and commercial milestone payments.

In February, the company signed a collaboration deal with AbbVie (NYSE:ABBV) to develop treatments for Parkinson's disease and other diseases characterized by the abnormal accumulation of misfolded alpha-synuclein protein. Voyager got $65 million in upfront payments and is eligible for up to $245 million in preclinical and phase 1 option payments and more down the road assuming drugs are developed from the collaboration.

Further data on its pipeline, including long-term data for VY-AADC, have helped keep the momentum going throughout the first half of the year.

Female doctor with hand on female patient's shoulder

Image source: Getty Images.

3. uniQure

Like Averum, uniQure's valuation is focused on one gene therapy, AMT-061, which treats hemophilia B.

In February, uniQure presented 12-week mid-stage data for AMT-061, showing three patients achieved 38% of normal levels of factor IX, the protein mutated in hemophilia B patients. While an average of 38% doesn't sound like a full recovery, the level is considered enough to eliminate or significantly reduce the risk of bleeding events.

By May, six-month data from the three patients showed the mean factor IX activity level had increased to 47% of normal.

uniQure will certainly have to show the treatment works in more patients before AMT-061 can be approved, but the initial data certainly look good and is headed in the right direction.

Past price appreciation

The potential for an acquisition is never a good buy thesis in and of itself. But good news that might trigger a buyout can also be a good reason for investors who are looking for continued development of a biotech's pipeline to buy shares.

The good news often leads to increasing stock prices, so there are no value plays to be found here. While it can be hard to buy after a double, sometimes investors are best off just holding their noses at sky-high valuations.

One of Motley Fool co-founder David Gardner's signs of a Rule Breakers stock is past price appreciation. As David puts it, "That's the market telling us that this company is onto something good and doing great stuff."

Maybe a few large pharmas will see it the same way and take these biotechs off investors' hands.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.