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3 Biotech Stocks That Surged Last Week

By Cory Renauer – Sep 18, 2020 at 5:23PM

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Find out what's behind their big run-ups to see if they can make it happen again.

Dozens of healthcare stocks grew by double-digit percentages last week, and shares of these three drugmakers rose further than nearly all of their peers. Clinical trial results, coronavirus vaccine progress, and a buyout were the major factors that turned these biotech stocks into big gainers last week.   

Want to know more about what produced these monstrous gains? Read on to see why the market drove these stocks through the roof.

Company (Symbol) Price Change During Week Ended Sep. 18, 2020  Market Cap
Immunomedics (IMMU) 103% $19.8 billion
Vaxart (VXRT 11.11%) 58% $917 million
Marinus Pharmaceuticals (MRNS -1.47%) 75% $428 million

Data source: Yahoo! Finance.

1. Immunomedics: Juicy buyout offer 

This company develops an increasingly popular class of cancer therapies that deliver tiny doses of chemotherapy directly to cancer cells using antibodies designed to recognize specific targets associated with aggressive tumor growth. The company's first drug to earn approval, Trodelvy, turned a lot of heads earlier this year when it earned approval to treat advanced-stage triple-negative breast cancer patients.

Person with glasses pointing at a rising stock chart.

Image source: Getty Images.

Some of the heads Immunomedics turned were at Gilead Sciences (GILD 1.29%) a biotechnology company well known for blockbuster sales of HIV and hepatitis treatments. Gilead Sciences offered Immunomedics shareholders $88 per share, which worked out to a whopping $21 billion

We'll get a chance to see why Gilead was so eager to add Trodelvy to its roster when Immunomedics presents more clinical trial data in a virtual presentation at this year's meeting of the European Society for Medical Oncology (ESMO) on Saturday, Sep. 19, 2020, at around 11 a.m EDT. 

2. Vaxart: Oral coronavirus vaccine

Shares of this biotech took flight last week after the company told investors the FDA approved an investigational new drug (IND) application for the company's oral coronavirus vaccine candidate. With an IND approval, Vaxart can begin giving its experimental vaccine tablets to people in the clinical trial setting; the company intends to begin enrolling patients for a phase 1 trial before the end of September.

If proven effective and safe, Vaxart's oral vaccine candidate would be a lot easier to distribute than today's leading vaccine candidates. For example, Moderna's (MRNA 0.48%) vaccine candidate, mRNA-1273 ,needs to be stored at minus four degrees Fahrenheit. 

Before writing off vaccines that require extra-cold storage, it's important to realize just how little we know about Vaxart's nameless coronavirus vaccine candidate. It's probably better to wait until after we've seen what happens to people after they take this company's vaccine candidate before putting this stock into any portfolio. Vaxart could end up worth less than a pocketful of nickles if its untested vaccine candidate fails to prevent new infections.

Happy person in a laboratory.

Image source: Getty Images.

3. Marinus Pharmaceuticals: Seizure reducer

This clinical-stage company's developing a neuroactive steroid called ganaxolone as a treatment for a severe form of early-onset epilepsy called CDLK5 deficiency disorder (CDD). This rare disorder leads to frequent seizures that are hard to control with standard antiepileptic drugs.

Shares of Marinus soared last week after the company reported positive results from the phase 3 Marigold study testing ganaxolone as a CDD treatment. A majority of patients treated with ganaxolone showed seizure frequency reductions of 32% or better, compared to a median 4% reduction measured in the placebo group.

It hasn't been that long since Marinus Pharmaceuticals' stock price tanked after ganaxolone failed to produce a significant benefit as a treatment for different forms of epilepsy and postpartum depression. Based on results posted last week, though, it looks like the company's new drug application for the treatment of CDD has a shot to earn approval if the FDA ignores a few potential issues. 

Now what?

Marinus' first new drug application might not be the slam dunk shareholders are hoping for. The response among the placebo group in the Marigold trial was much lower than the 10% to 20% range that the company had been expecting. Scores related to caregivers' impression of change in seizure intensity and duration was also disappointing.

Immunomedics stock doesn't have much further to climb before it reaches the $88 per-share price already agreed upon. That said, shareholders will most likely receive a few percentage points more for their shares by waiting for the deal to close than they would by selling them now to lock in a quick gain.

A safe and effective oral coronavirus vaccine from Vaxart could have a huge advantage over vaccine candidates further ahead on the development timeline. That said, there are already 40 different vaccine candidates in clinical-stage testing, nine of which are already in phase 3 trials.

Cory Renauer owns shares of Gilead Sciences. The Motley Fool owns shares of and recommends Gilead Sciences. The Motley Fool recommends Immunomedics. The Motley Fool has a disclosure policy.

Stocks Mentioned

Immunomedics Stock Quote
Immunomedics
IMMU
Marinus Pharmaceuticals Stock Quote
Marinus Pharmaceuticals
MRNS
$4.69 (-1.47%) $0.07
Vaxart, Inc Stock Quote
Vaxart, Inc
VXRT
$1.30 (11.11%) $0.13
Gilead Sciences Stock Quote
Gilead Sciences
GILD
$89.03 (1.29%) $1.13
Moderna Stock Quote
Moderna
MRNA
$182.35 (0.48%) $0.87

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

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