Looking for stocks that could make big moves in the new year? There are at least three in the biotech space with enormous catalysts on the way that could drive their prices higher or lower overnight.
It's important for biotech investors to think long term, but a decision from the Food and Drug Administration to approve a new drug can lead to swift gains. The FDA is expected to issue approval decisions for these three drugs before the first quarter of 2021 ends.
| Company (Ticker) | Candidate Under Review | Indication | PDUFA Date |
|---|---|---|---|
| Biogen (BIIB 1.87%) | aducanumab | Alzheimer's disease | 3/7/2021 |
| bluebird bio (BLUE -0.39%) | ide-cel | Multiple myeloma | 3/27/2021 |
| Targeted Therapeutics (TGTX -1.40%) | umbralisib | Marginal zone lymphoma | 2/15/2021 |
PDUFA: Prescription drug user fee act. Data source: Company press releases.
Here's why investors want to mark these upcoming action dates on their calendars.
1. Biogen's aducanumab
Alzheimer's disease (AD) affects about one in 10 Americans over 65 years old. There aren't any treatments available to slow the disease's progression. Biogen's AD candidate, aducanumab, is a monthly infusion that prevents tangled protein fragments from forming plaques in the brain.
Image source: Getty Images.
Amyloid plaques are associated with AD, but treatment with aducanumab hasn't been proven to slow the rate of cognitive decline. In November, the FDA assembled a panel of independent experts to discuss the pending application. None of the experts were convinced Biogen provided enough proof of efficacy to warrant approval.
Aducanumab is a monthly infusion meant for long-term use by generally healthy people that are just beginning to show signs of Alzheimer's disease. It's been associated with dangerous brain swelling, but the FDA downplayed any safety concerns during its advisory committee meeting. It appears strongly in favor of approval.
Biogen's multiple sclerosis franchise is sagging. The company badly needs a new blockbuster drug to continue growing its bottom line. Biogen investors will be biting their nails until the agency announces a decision that could swing either way. The FDA isn't required to follow the advice of its independent advisory panels, but it's never ignored a panel of experts so strongly united in their objection to a controversial drug application.
2. Bristol Myers Squibb and bluebird bio's ide-cel
In September, the FDA began a priority review of ide-cel, a cell-based cancer therapy for multiple myeloma that bluebird bio discovered for Celgene before Celgene was acquired by Bristol Myers Squibb (BMY 0.66%) in 2019. This is a big deal for bluebird bio because it could become the company's first commercial-stage drug.
Based on efficacy results alone, ide-cel's application looks like a slam dunk. Among 128 patients treated with different dosage strengths of ide-cel, 82% responded to the treatment, and 31% achieved complete remission. These results would be remarkable for newly diagnosed multiple myeloma patients, but these were people who'd already been exposed to at least three previous lines of treatment without success.
Ide-cel's potential approval is one that biotech investors with shares of Bristol, bluebird, or any business trying to develop new treatments with complicated manufacturing processes should watch closely. In 2020, the FDA increased scrutiny of cellular cancer treatments like ide-cel and gene therapies that rely on complex manufacturing processes. If a well-heeled pharmaceutical company like Bristol Myers Squibb stumbles over an unforeseen manufacturing issue, investors could get nervous about smaller biotechs trying to develop their own complex treatments.
Image source: Getty Images.
3. TG Therapeutics' umbralisib
In August, the FDA began reviewing an application from this clinical-stage biotech for umbralisib, a potential new treatment for marginal zone lymphoma (MZL) and follicular lymphoma (FL). The FDA is expected to issue a decision regarding MZL in February. This possible green light could be the first of several for the company.
The FDA is expected to issue a decision regarding umbralisib as a treatment for FL in June. Earlier this month, TG Therapeutics began a rolling submission for its next new drug candidate, ublituximab plus umbralisib (U2), as a combination treatment for the most common form of leukemia.
In trials supporting TG Therapeutics' rolling submission, treatment with U2 reduced newly diagnosed leukemia patients' risk of disease progression by 52% compared to standard care. An approval to treat a small MZL population with umbralisib in February would go a long way to convince investors that U2 has a good chance with the larger leukemia population.
These dates are flexible
It costs almost $3 million to file a new drug application with the FDA. In return for such a hefty fee, the agency is supposed to complete their review within 10 months, or six if an application is given special priority.
Most of the time, the agency shares approval decisions within a few days of its proposed action dates, but not always. Flag these dates on your calendar, but don't be surprised if the FDA announces an approval decision months ahead of schedule. Also, be prepared for last-minute announcements that push proposed action dates several months into the future.
