Investing in biotechnology companies is both difficult and incredibly exciting. Watching as a company goes through the regulatory approval process, from a fledgling early-stage clinical trial biotech to an industry juggernaut, can be exhilarating.
While positive outcomes aren't guaranteed in clinical trials, let's look at two promising companies at different stages of development. Blueprint Medicines (BPMC -1.66%) has a promising drug candidate in phase 1/2 clinical trials, while Novocure (NVCR -0.89%) is looking to expand the labeling of its Optune device into larger markets. If results continue to be positive, both healthcare companies could be in for a multibillion-dollar windfall.
Blueprint Medicines
After a sluggish past few years, including a 37% slump in its stock price since the start of the year, Blueprint Medicines now looks ready to charge ahead. Its primary focus has been mastocytosis, a disease in which certain types of cells release substances that can cause signs and symptoms similar to those of an allergic reaction -- and result in severe inflammation and organ damage.
Ayvakit, its approved mastocytosis drug, is growing rapidly. The therapy generated revenue of $52.9 million in fiscal 2021, its first full year on the market, and Blueprint is guiding for $115 million to $130 million in Ayvakit revenue this year. After recently winning approval in the EU and with label expansion likely in the U.S., Ayvakit should help Blueprint Medicines blossom this year.
And the good news for 2022 doesn't stop there. The $4.1 billion biotech just presented data on its potential drug in phase 1/2 development, BLU-945, and is looking to share further data over the next 18 months. BLU-945 is being studied for treatment of non-small cell lung cancer (NSCLC) with mutations in a gene called EGFR -- a disease that is particularly difficult to treat.
This could be a multibillion-dollar market too with roughly 70% of the 59,000 annual patients in the U.S. needing to progress to second-line therapy. Today's first-line agent, AstraZeneca's Tagrisso, generated revenue of $5 billion in fiscal 2021. In phase 1 data released earlier this month, BLU-945 decreased circulating tumor DNA -- a promising sign of therapeutic response -- and was able to decrease tumor size. It's still early, but the results are quite intriguing.
Image source: Getty Images.
Blueprint's ability to get Ayvakit to market and expand its label despite the pandemic has been admirable. It certainly seems to have a healthy growth trajectory for 2022 and beyond for its mastocytosis treatment. If its pipeline continues to yield promising results, Blueprint Medicines could be one of 2022's best stories for biotech investors.
Novocure
As the maker of Optune, a wearable device that disrupts cancer cell growth, Novocure could also be a big winner in 2022. While already approved primarily for glioblastoma (a cancer of the brain or spinal cord), Optune could quadruple its addressable market nearly overnight later this year when it provides an update on its phase 3 trial for NSCLC. If data continues to be reassuring, shareholders are likely to be quite pleased. In one encouraging sign, an interim analysis was stopped early because of strongly positive results.
Beyond NSCLC, the future remains quite bright for Optune. Novocure has four late-stage trials with data due in the next few years. Optune's opportunity in the NSCLC market is estimated at 46,000 patients in the U.S. annually with another 16,000 for ovarian cancer and an additional 38,000 for NSCLC that has spread to the brain. Phase 3 trials in those last two indications wrap up in 2023 with data for pancreatic cancer, a 43,000-patient market annually, due in 2024. Added up, that is 14 times the current 11,200 glioblastoma patients annually who are currently eligible for Optune treatment.
This cancer fighter's financials are solid, too. With $938 million in cash on hand at the end of 2021, there is plenty in the bank to fuel its clinical trials, not to mention its enviable 79% gross margin. And it even squeaked out a $1.7 million profit last quarter on an adjusted EBITDA basis.
Plus, many oncologists are already familiar with Optune. Should its future trials be positive, sales could ramp up quickly, as it already has a number of treating clinicians familiar with Optune. With several catalysts that would greatly expand its addressable market, Novocure could be 2022's big winner -- for both patients and shareholders.
