As 2015 draws to a close, biotech investors might be in the merriest mood of all -- especially those who own shares of a select group of biotech stocks. While the main market indexes have essentially been treading water for the year, three biotech stocks with market caps over $250 million more than tripled. Here are biotech's biggest winners of 2015.
1. Eagle Pharmaceuticals
Eagle Pharmaceuticals (EGRX 1.50%) soared in an impressive way during 2015, gaining more than 520% as of late December. This sizzling run began on Feb. 17 when Eagle announced that Teva Pharmaceuticals (TEVA 1.07%) had agreed to exclusively license its drug EP-3102 (renamed later as Bendeka), a rapid infusion product targeting treatment of chronic lymphocytic leukemia and indolent B-cell non-Hodgkin's lymphoma.
Teva paid $30 million up front to Eagle -- almost as much revenue as the small biotech had seen in the previous two years combined. The deal also called for potential milestone payments of up to $90 million, plus double-digit royalties for Eagle if the drug won regulatory approval.That approval came on Dec. 8, with Eagle picking up a $15 million milestone payment.
Bendeka wasn't the only source of good news for Eagle in 2015. Less than a week after the Teva deal was announced, the FDA granted seven years of U.S. market exclusivity to Eagle's Ryanodex, a treatment for malignant hyperthermia. In September, Eagle successfully completed the clinical portion of a study in treating exertional heat stroke.
Exelixis (EXEL -1.35%) shareholders experienced a miserable 2014, but this year proved to be much more pleasant. Shares of the biotech surged more than 240%.
Several positive developments helped Exelixis' stock to double by mid-year. Its partner, Roche (NASDAQOTH: RHHBY), won acceptance from the FDA for the new drug application filing for Exelixis' Cotellic in combination with vemurafenib in treating melanoma. Exelixis also had good news from a phase 2 study of Cometriq in treating non-small-cell lung cancer.
The game-changer for Exelixis in 2015, though, came in July, when it released results from the phase 3 trial of Cometriq in treating renal cell carcinoma. Those study showed Cometriq reducing risk of disease progression or death by 42% compared to blockbuster kidney cancer drug Afinitor.
Exelixis scored again later in the year with two wins for Cotellic. The FDA approved the drug in combination with vemurafenib as a treatment for advanced melanoma on Nov. 10. That thumbs-up was followed a couple of weeks later by European approval of the combo.
Like Exelixis, Prothena (PRTA 2.27%) had racked up year-to-date gains of more than 240% as of late December. The first big catalyst for Prothena came in March with positive results from a phase 1 study of PRX002, a potential treatment for Parkinson's disease co-developed with Roche.
While there are some treatments currently available for Parkinson's disease, they are only effective at controlling early symptoms of the disease. The promise of PRX002 is that it targets what some research suggests may be causing the symptoms, a protein known as alpha-synuclein. Although Prothena's drug is only in an early stage clinical trial, many investors are excited about its prospects.
Prothena also benefited from good news about another drug in its pipeline -- NEOD001. The biotech completed enrollment of an expansion cohort in October for a phase 1/2 study of the drug in treating AL amyloidosis and persistent organ dysfunction. Prothena also announced plans for another phase 2 study of NEOD001.
Bendeka should be a hit for Eagle and Teva in 2016. With Eagle pulling in 20% royalties on the drug, the small biotech could potentially triple its revenue next year and establish consistent earnings.
Exelixis probably won't see improvement at those levels, but the company should reap rewards from its deal with Roche on Cotellic. The biotech will file for regulatory approval in the U.S. and Europe for Cometriq in treating kidney cancer in early 2016. While there's no guarantee, I suspect Exelixis will win those approvals.
As for Prothena, any regulatory approvals and product revenues are still well down the road. However, I still think next year could be a very good one for this clinical-stage biotech if there are further positive results from PRX002 and NEOD001.
Will these three biotechs be able to repeat their 2015 performances in 2016? Probably not. That doesn't mean they won't remain winners in the new year, though.