Have you been looking for a growth stock that can supercharge your portfolio? It won't happen overnight, but there's a biotech stock flying under the radar that could turn $5,000 into a down payment for a new home in the not-so-far-off future.
BridgeBio Pharma (BBIO 0.28%) and its unique approach to the business of drug development is already showing signs of success, but its focus on genetic diseases hasn't seen much attention in 2020. Here are 3 reasons why you'll be hearing a lot more about BridgeBio and its soaring stock price in the years ahead.
1. BridgeBio moves fast
It's only been five years since BridgeBio was formed to treat inherited diseases at their source, and less than two years since the company began tapping U.S. stock exchanges for capital. In this relatively short amount of time, the company and its affiliates have already submitted applications for two new drugs and more are on the way.
On Dec. 1, 2020, the FDA began reviewing an application for infigratinib, an orally available treatment for drug bile duct cancer patients with tumor growth driven by FGFR2 mutations. In September, the FDA officially began reviewing BridgeBio's application for fosdenopterin, a potential new treatment aimed at patients with molybdenum cofactor deficiency (MoCD) type A.
MoCD's a rare but lethal disorder that lacks treatment options, and bile duct cancer patients are underserved by standard chemotherapy. For these reasons, the FDA has agreed to give shortened reviews to infigratinib and fosdenopterin. Instead of the usual 10-month time frame, the FDA is expected to issue approval decisions within six months or less.
2. So many more on the way
Over the past five years, BridgeBio has ushered 10 experimental new drugs into clinical trials and they're advancing quickly. Acoramidis is an oral drug that stabilizes transthyretin (TTR), a transport protein that breaks up and forms lethal plaques that damage the heart and other organs.
Last year, Pfizer (PFE 0.98%) launched a TTR stabilizer of its own in the U.S. called Vyndaqel and it's already on pace to deliver around $1.4 billion in annual revenue. In 2021, we'll see top-line data from an ongoing phase 3 trial with acoramidis and there's a good chance it will compare well to results that led to Vyndaqel's success.
As a first-in-class treatment that targets fibroblast growth factor receptors, infigratinib could successfully treat a handful of different populations that lack effective options. Infigratinib's also in a phase 2 trial as a treatment for achondroplasia, the most commonly inherited form of short-limbed dwarfism.
BridgeBio is also developing a potential first-in-class calcium-sensing receptor antagonist called encaleret for the treatment of an inherited form of hypocalcemia. Next year, results from an ongoing mid-stage clinical trial with encaleret could add another member to BridgeBio's list of late clinical-stage drug candidates with blockbuster potential.
3. A new business model for biotech
BridgeBio is actually a team of experienced drug developers who shop around academic laboratories and medical institutions for nascent research programs that meet some well-defined criteria. Instead of shooting at anything that moves, the company only acquires and develops research related to cancers with clear genetic drivers and diseases that arise from defects in a single gene.
In a nutshell, BridgeBio buys up early-stage research programs. Then the company builds them into functioning biotech companies complete with experienced management teams that may work at several BridgeBio subsidiaries.
With an expanding web of affiliate companies to keep them busy, job security isn't an issue for the experienced professionals that manage BridgeBio's subsidiaries. This makes it a lot easier to make tough decisions about which programs need to get cut the moment new data says they probably aren't a great investment.
At recent prices, BridgeBio Pharma sports a market cap of around $6 billion, which is a lot to pay for any company that's still losing money. The company finished September with $609 billion in cash after burning through $329 million during the first nine months of 2020.
The company's inflated valuation right now means the market is expecting BridgeBio to launch at least one blockbuster drug or several fairly successful drugs in the foreseeable future. This means the stock could tumble if the FDA finds an unexpected problem with BridgeBio's applications for infigratinib or fosdenopterin. With a growing web of subsidiaries developing a long slate of targeted treatments, though, this stock is probably worth the risk right now for patient investors.