The biotechnology industry's chock-full of stocks that could quickly skyrocket overnight and make you filthy rich in the process. All three of these clinical-stage biotechs are relatively small at the moment, but they have potential blockbuster drugs in development that could send their stock prices screaming higher.
|Company (Symbol)||Market Cap||Lead Candidate||Indication|
|Bicycle Therapeutics (NASDAQ:BCYC)||$269.9 million||BT1718||Oncology|
|BioXcel Therapeutics (NASDAQ:BTAI)||$571 million||BXCL501||Neuroscience|
|IGM Biosciences (NASDAQ:IGMS)||$1.8 billion||IGM-2323||Oncology|
1. Bicycle Therapeutics: Bicyclic peptides
This biotech is pioneering the development of short amino acid sequences that form highly stable loops called bicyclic peptides, or bicycles. Earlier this year, Roche (OTC:RHHBY) paid Bicycle Therapeutics $30 million upfront to discover and develop novel bicycle-based cancer treatments. If the collaboration with Roche delivers multiple new drugs, Bicycle could end receiving up to $1.7 billion in milestone payments and a significant royalty on potential sales.
Before Bicycle's relationship with Roche passes milestones with significant payouts, we'll probably have mid-stage clinical trial results from the company's lead candidate, BT1718. This is a bicycle that releases a chemo bomb into cancer cells with a protein called EphA2 on their surface. Much larger antibody-drug conjugates haven't been able to get the job done when targeting EphA2, possibly because of their relatively large size.
If Bicycle's bicycles can succeed where antibody-drug conjugates have stumbled, this stock could reach the moon. It could be more than a year before we know if the company's unique approach has merit. Social distancing measures haven't helped Bicycle pin down a date to begin a phase 2a study with BT1718, but the company plans to start the trial this year.
2. BioXcel Therapeutics: Sedative delivery
It isn't easy to get excited about biotechs applying a new spin to old drugs, but the profits they can generate should get your attention. BioXcel's lead candidate, BXCL501 is a sublingual version of a popular surgical sedative called dexmedetomidine.
Dexmedetomidine's delivered to the bloodstream as an infusion which isn't a problem for patients about to undergo surgery, but it has limited the drug's potential. As a film that dissolves under the tongue instead of intravenously, BXCL501 could find a much larger audience.
At the moment, healthcare providers use the active ingredient in BXCL501 off-label to calm delirious hospital patients and ease substance withdrawal symptoms for opioid withdrawal patients that desperately need some sleep. A sublingual film that delivers a limited dose of the powerful sedative could become a powerful tool to help recovering addicts that haven't already been hospitalized, and that's just the tip of the iceberg.
We'll know a lot more about BXCL501's chances of becoming a blockbuster drug if ongoing pivotal studies readout near the middle of 2020, as expected.
3. IGM Biosciences: Octopus antibodies
Antibodies are proteins the immune system uses to recognize viruses, malignancies and other sources of trouble. IGM Biosciences is working on a relatively unexplored type of antibody called immunoglobulin M or IgM, which are famous in certain circles for having multiple binding domains. Nearly all of the therapeutic antibodies produced by the biotechnology industry so far have been of the immunoglobulin G (IgG) variety, which has just two target binding domains.
Some of the most successful cancer therapies of the past decade target a surface protein often found on malignant cells called CD20, but their activity after making contact is somewhat limited because of their simple shape. IGM Biosciences is betting that its lead candidate, an IgM antibody IGM-2323 can do a better job because it binds to multiple CD20 targets and still has a binding domain available to alert the immune system.
IGM Biosciences completed its initial public offering last year and began treating advanced-stage non-Hodgkin's lymphoma patients with IGM-2323 in October. The company plans to share initial data from the phase 1 trial in the second half of 2020.
Adjust for risk
These companies can't tell us when they'll start generating reliable revenues from the experimental therapies they're developing, which means any disappointment along the way could lead to sharp losses. At the moment, we know almost nothing about IGM-2323's ability to deliver on its promise for real people with cancer. If initial results from its first trial aren't spectacular, IGM's $1.8 billion market cap could get cut in half overnight.
As pre-commercial biotechs, IGM Biosciences, BioXcel, and Bicycle are relying on equity to further the development of their experimental drugs and there's no telling how many shares they'll need to offer before they can start paying investors back. While these stocks could make you filthy rich, they could just as easily lead to swift and heavy losses.