Please ensure Javascript is enabled for purposes of website accessibility

3 New Biotech Stocks That Keep On Soaring

By Cory Renauer - Updated Aug 30, 2019 at 2:51PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Can their share prices continue to climb?

In recent years, mountains of institutional capital have flowed into hundreds of biotech start-ups, and so many of them have gone public that it's impossible for anyone with a day job to keep track of them all.

I'll let you in on a little secret. Those of us whose job it is to know things about the biopharmaceutical industry can't keep up with all the new players that reach the Nasdaq exchange, either. 

If trying to stay on top of all the new biotech stocks that you could buy has you feeling overwhelmed, relax. Most of them aren't worth the effort. But these three stand out among the ones that continued to climb after the buzz around their initial public offerings faded away. Here's why. 

Company Initial Public Offering Date Stock Price Gain Since IPO Market Cap
Eidos Therapeutics (EIDX) 6/20/2018 88% $1.6 billion
Turning Point Therapeutics (Nasdaq: TPTX) 4/17/2019 100% $1.8 billion
Stoke Therapeutics (STOK 3.98%) 6/19/2019 36% $1.2 billion

1. Eidos Therapeutics: Part of something much larger

Eidos Therapeutics has taken off since its IPO thanks to mid-stage clinical trial results that show its lead candidate, AG10 is really good at holding together a vital transport protein, called transthyretin (TTR). A drug like AG10 could make a big difference for an estimated 400,000 people around the world currently experiencing a painful, fatal buildup of TTR fragments in their hearts.

Nearly two-thirds of Eidos is owned by BridgeBio (BBIO 9.37%), and its former parent would like to repurchase all the Eidos shares that it doesn't own, in exchange for 1.3 BridgeBio shares. BridgeBio doesn't intend to develop drugs itself. Instead, it supports fledgling start-ups, like Eidos. Since its inception in 2015, BridgeBio has assembled subsidiaries with 15 active rare-disease programs, four of which are already in pivotal trials.

If AG10 puts up results good enough to contend with the first Food and Drug Administration-approved TTR stabilizer, a drug called Vydaqel from Pfizer (PFE -0.15%), shares of Eidos, and BridgeBio will continue to soar.

Happy woman with her arms raised in front of an upward sloping arrow.

Image source: Getty Images.

2. Turning Point Therapeutics: Buyout target

This has been a terrific year for developers of small-molecule cancer drugs, largely because biopharma companies with deep pockets keep buying them at a premium. Turning Point Therapeutics has doubled in its first few months because the company's already moved its lead candidate, repotrectinib, into a registrational study that could make it a new treatment option for people with ROS1 positive non-small cell lung cancer, or NTRK positive solid tumors regardless of where they originated.

Repotrectinib is a kinase inhibitor designed to address acquired treatment resistance problems common among this class of treatment and it appears to work as advertised. Earlier this year, Turning Point presented results from the dose determination portion of an ongoing registrational trial that showed at 16 months, repotrectinib shrank ROS1 positive tumors for 83% of patients that hadn't tried a kinase inhibitor before and 39% of those with previous kinase inhibitor experience. 

The early results are worthy of attention, but they're a little hard to interpret because there were seven different dosages tested. In late September, the company will present more results from its ongoing repotrectinib study. If they don't make surprising data we saw earlier look like a fluke, this stock will soar several times higher. 

Smiling laboratory technician at work.

Image source: Getty Images.

3. Stoke Therapeutics: Big expectations

This is another young drugmaker trying something different, but unlike Turning Point and Eidos, Stoke Therapeutics doesn't have any clinical data for its lead candidate, STK-001, yet. In fact, Stoke isn't allowed to begin a clinical trial with STK-001's intended audience, patients with a severe form of childhood epilepsy called Dravet syndrome yet. The company won't be able to begin clinical studies until the FDA approves an investigational new drug (IND) application that the company won't be able to submit until 2020 at the earliest.

Stoke's developing RNA drugs meant to upregulate the expression of specific proteins that patients born with severe genetic illnesses can't produce on their own. Part of Stoke's approach is old hat for RNA-antisense pioneer, Ionis Pharmaceuticals, but Stoke's the first company to try controlling the splicing of precursor messenger RNA to boost the effect.

Stoke might not have any evidence that its new technique will actually work for humans, but that hasn't stopped investors from pushing the company's market cap up to an unexplainable $1.2 billion. That's a lofty perch to fall from if STK-001 doesn't meet the extremely high expectations placed on its first clinical trial attempt. 

View from top of a climbing wall.

Image source: Getty Images.

Most likely to climb higher?

Stoke Therapeutics could be on the right path, but the odds of coming out ahead are stacked against investors who buy shares of any biotech with a 10-figure market value and zero clinical trial data to back it up. 

Eidos shares have been trading at 1.47 times BridgeBio's share price recently, so the chances of another climb before the recently proposed acquisition can run its course are mighty slim. With an enormous pipeline under development by a stable of subsidiaries, though, Eidos investors will want to keep the BridgeBio shares they'll probably receive before the end of the year.

The stock most likely to continue to rise, however, has to be Turning Point. Nearly every big pharma seems eager to buy the kind of cancer treatments the start-up's developing. A repeat of the success we saw earlier among a larger group of patients could make the company's phone ring with one buyout offer after another.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Eidos Therapeutics, Inc. Stock Quote
Eidos Therapeutics, Inc.
EIDX
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$53.91 (-0.15%) $0.08
Nasdaq, Inc. Stock Quote
Nasdaq, Inc.
NDAQ
$155.64 (3.12%) $4.71
Ionis Pharmaceuticals, Inc. Stock Quote
Ionis Pharmaceuticals, Inc.
IONS
$37.63 (2.67%) $0.98
BridgeBio Pharma, Inc. Stock Quote
BridgeBio Pharma, Inc.
BBIO
$7.24 (9.37%) $0.62
Stoke Therapeutics, Inc. Stock Quote
Stoke Therapeutics, Inc.
STOK
$12.02 (3.98%) $0.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
344%
 
S&P 500 Returns
120%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.