One of the best ways to make money in the market is by getting in on a stock before everyone else does. That method carries risk, though, as lesser-known biotech stocks are often not profitable and may never get there.
However, Atara Biotherapeutics (ATRA 1.13%), Agios Pharmaceuticals (AGIO 8.41%), and Beam Therapeutics (BEAM -0.79%) at least have a road map toward becoming profitable. These companies only make sense as long-term plays for investors who are not averse to some risk. The three biotech stocks aren't profitable yet and their shares are all down so far this year.
But they have unique approaches that set them apart from competitors, and two of the three have newly approved therapies.
Staying on the Beam
Beam Therapeutics is different from many CRISPR-editing biotechs in that it uses ex-vivo base cell editing instead of nuclease cell editing. The former method is considered more precise because it changes single DNA letters instead of larger strips of genetic code, and does so without breaking both strands of a DNA's double helix.
Beam stock is down more than 48% so far this year, but the company has a growing pipeline that shows promise. Its lead therapy is BEAM-101 to treat various blood diseases, including sickle cell disease (SCD) and beta thalassemia. The therapy is in a phase 1/2 trial to treat SCD.
In early December, the Food and Drug Administration (FDA) lifted its clinical hold on the Investigational New Drug Application for BEAM-201. The therapy is being tested to treat relapsed/refractory T-cell acute lymphoblastic leukemia.
The clinical-stage biotech isn't generating revenue yet, but through the third quarter it had $1.1 billion in cash. It lost $109.6 million in the quarter, but it has enough funds to continue operations for several years.
A standout in the use of T-cell therapies
Atara Biotherapeutics' shares are down 77% so far this year. The biotech company has a unique focus in developing off-the-shelf, allogeneic T-cell immunotherapies to treat serious diseases including solid tumors, hematologic cancers, and autoimmune disease. Using healthy donor cells, its therapies require no gene editing and differ from autologous therapies that edit an individual's cells before reintroducing them into the donor's body.
On Dec. 19, the company scored an approval in Europe for its lead therapy, Ebvallo. The approval is to treat patients aged two and older with relapsed or refractory Epstein-Barr virus-positive (EBV+) post-transplant lymphoproliferative disease, a potentially fatal condition that can follow an organ transplant. The therapy is also in trials to treat nasopharyngeal carcinoma and cancers related to EBV+.
The company is in line to get a $30 million milestone payment from French pharmaceutical and cosmetics company Pierre Fabre for receiving approval for Ebvallo in Europe. Pierre Fabre will market the drug in the European Community.
As of the third quarter, Atara had $265.4 million in cash. That, combined with the milestone payment, should be enough to fund operations into the first quarter of 2024, the company said. Atara's next step is to find a partner in the U.S. as it applies for a biologics license application for Ebvallo here.
The company's other lead pipeline therapy is ATA188 to treat progressive multiple sclerosis. Atara has other early-stage oncology candidates, all of which use off-the-shelf allogenic T-cell immunotherapies.
The big risk for Atara is its relatively weak cash position as it begins to market Ebvallo. However, the potential for its therapies could make it a buyout candidate for a larger company with the wherewithal to promote the drug.
Agios has a potential blockbuster in Pyrukynd
Agios Pharmaceuticals has shown it has a future beyond oncology. The company sold acute myeloid leukemia drug Tibsovo and the rest of its oncology pipeline to Servier Laboratories in 2020 for $1.8 billion. The company is now focusing on diseases that involve pyruvate kinase (PK) deficiency, which can cause lifetime chronic anemia in adults. Its newly marketed drug is Pyrukynd, which just picked up its second approval in Europe.
The therapy, which was already approved by the FDA last February to treat hemolytic anemia, was just approved in November in the E.U. to treat PK deficiency. Though it's not a foregone conclusion, it is likely the therapy will get approval for the same indication from the FDA.
Agios' shares are down a little more than 14% so far this year. It is also looking at Pyrukynd as a therapy to treat two other genetic blood disorders in beta thalassemia and sickle cell disease. An approval for either disorder would significantly increase revenue for Agios.
It's a good time to get in on the stock as it ramps up marketing for Pyrukynd. It has $1.18 billion in cash and cash equivalents, and the drug delivered $7.4 billion in revenue through nine months. That's a strong start for the drug's first two full quarters since its launch, and it could grow considerably as applications are added.
