Three of the best-performing pharmaceutical stocks over the past year have been clinical-stage biotech and biopharmaceutical companies -- businesses that aren't making profits but have promising drugs, or more often, drug candidates.
Though a few candidates will become breakout successes, the overwhelming majority of clinical-stage drugs never make it to market, and 11 biopharmaceuticals went bankrupt last year, according to a BioPharma Dive report. So it should come as no surprise that such companies carry some of the biggest risks -- and offer some of the biggest rewards -- in the healthcare sector.
These three have already rewarded investors who bought a year ago, though Relmada remains far below the 10-year-high of $71.60 it set in 2014. The question now is, how much higher can any of them go from here?
Relmada is turning old drugs into new ones
Relmada doesn't have any revenue yet, but it has four drugs in its pipeline. One of them, REL-1017 (dextromethadone), looks promising as a treatment for major depression disorder (MDD). According to Relmada, REL-1017 fared well in its phase 2 trials and the company plans to start two phase 3 trials in the fourth quarter.
Its other three drugs are REL-1015 (LevoCap ER), REL-1021 (MepiGel), and REL-1028 (buprenorphine). LevoCap ER is a time-release formulation of Levorphanol, a powerful synthetic opioid which has been used as a pain reliever for nearly 80 years. MepiGel is a topical version of local anesthetic mepivacaine, used for treating neuropathies that occur in diabetes, neuralgia, and HIV-associated neuropathy. And buprenorphine is used to treat opiate use disorder as well as chronic pain.
As of March 31, the company had $115 million in cash; given that it spent $14 million last year, it has enough in the bank to possibly last for another eight years or so before it needs to either turn a profit or seek out other sources of funding.
Neoleukin has been a fast starter
Neoleukin Therapeutics (NLTX), a Seattle-based biopharmaceutical that just went public last August, is up more than 500% since then. For its therapeutics, the company uses de novo proteins -- entirely new proteins designed using models that require extraordinary computing power to predict their structure (as opposed to ones already existing in the body) -- to treat immunological disorders. The company was launched by the researchers at the University of Washington who discovered the de novo proteins it's developing. While Neoleukin is a start-up, it has some history behind it as it merged with Aquinox Pharmaceuticals last summer.
Last week, Neoleukin announced positive preclinical findings for its versatile anti-tumor drug candidate NL-201 when tested on animals. The company said it plans to present an Investigational New Drug Application (IND) to the FDA by the end of the year.
Neoleukin says NL-201 mimics interleukin-2 (IL-2), an immune-signaling molecule that is produced by the body's T-cells as a response to infections. NL-201 is more stable than IL-2 immunotherapies and lacks their side effects, such as significant toxicity and lower effectiveness when binding with nontargeted cells. Current IL-2 immunotherapies are typically used in patients with melanoma and renal cell carcinoma.