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3 Stocks With Big News Coming at ASCO 2019

Todd Campbell, The Motley Fool

The annual American Society of Clinical Oncology (ASCO) meeting is fast approaching, and abstracts from companies presenting at the conference next month are set to be released at 5 p.m. later today. It's anyone's guess what the abstract data will include or how industry watchers will react to the presentations, but investors might want to focus their attention on MacroGenics (NASDAQ: MGNX), Blueprint Medicines (NASDAQ: BPMC), and Amgen (NASDAQ: AMGN). All three are expected to report data at ASCO that could move their stock prices.

Targeting late-line HER2

MacroGenics shares surged in February after it reported phase 3 trial results of margetuximab in HER2-positive metastatic breast cancer. An optimized anti-HER2 antibody, margetuximab is specially designed to elicit a stronger immune system response in HER2 patients than Herceptin, a mega-blockbuster HER2 antibody drug.

A microphone on a stand in front of an empty auditorium.

IMAGE SOURCE: GETTY IMAGES.

In trials, margetuximab plus chemotherapy outperformed Herceptin plus chemotherapy significantly, delivering a 24% improvement in progression-free survival (PFS) in the margetuximab arm of the study when compared to the Herceptin arm.

Roughly 85% of trial participants were carriers of CD16A (FcγRIIIa) 158F allele, a subset of patients who historically respond poorly to Herceptin. In those patients, there was a 32% improvement in PFS versus Herceptin.

The company hasn't reported any overall survival data yet, but the ASCO abstract and presentation could include it, and if it does, then good news could clear the way for a lucrative licensing deal.

MacroGenics plans to file for FDA approval based on PFS data later this year. However, European regulators want to see OS data, so a deal could be kept at bay until those results are available. During the company's latest earnings conference call, management said it's "exploring partnerships" and that it's "talking to a number of different parties that are structured in different ways and with different interests." Given those comments, any new data at ASCO could move the needle for investors.

A blueprint for precision medicine

In February, Eli Lilly & Co. (NYSE: LLY) acquired Loxo Oncology, a precision-medicine biotech, for $8 billion after Loxo reported intriguing data for LOXO-292, a RET inhibitor, and secured FDA approval for its TRK inhibitor, Vitrakvi. The deal catapulted Lilly to the forefront of a shift to fighting cancer based on genomics rather than the location of cancer's origin, but Lilly isn't the only company working on this approach. Blueprint Medicines is also in the hunt, and it plans to unveil data from trials involving avapritinib and BLU-667 at ASCO next month.

An inhibitor of KIT and PDGFRA, two protein kinases that can become overly active in patients with gastrointestinal stromal tumors (GIST), avapritinib is being studied as a second-line, third-line, and fourth-line treatment. Blueprint has already reported positive fourth-line GIST data and it's announced plans to file for FDA approval in that indication later this year. A good showing at ASCO could increase confidence avapritinib will succeed in earlier stages someday, too, opening a larger commercial opportunity for the company.

At ASCO, investors will also get updated data on BLU-667, a RET inhibitor that's racing against LOXO-292 to the finish line. In March, Blueprint Medicines said the overall response rate in RET-fusion non-small cell lung cancer was 62% and the ORR in RET-mutant medullary thyroid cancer was 63%. If additional data is also competitive to LOXO-292, it would add conviction to management's plan to file for FDA approval in early 2020.

The next class of cancer drugs

Unlike MacroGenics and Blueprint Medicines, Amgen is a proven biotech bellwether. The company generates over $5 billion per quarter in revenue from a host of products, including a slate of cancer drugs that contributed $1.2 billion in sales to its top line in the first quarter.

Amgen hopes to solidify its standing as a leading oncology player by presenting data at ASCO on its bispecific T cell engager (BiTE) drugs. Bispecifics may improve the immune system's ability to find and destroy cancer by binding to both a target and a T cell.

At ASCO, Amgen will discuss AMG 420, a drug targeting BCMA, a protein expressed by multiple myeloma cancer cells. Last year, management said that five heavily pretreated multiple myeloma patients had a complete response to AMG 420. If updated data at ASCO is anywhere near that good, then this drug could someday revolutionize late-line treatment.

Data on AMG 212, a BiTE targeting a commonly expressed antigen in prostate tumors, is also expected at ASCO. AMG 212 is licensed to Bayer, but results could boost interest in AMG 160, a wholly owned drug Amgen has in development that works similarly.

Finally, management will provide its first look at data for AMG 510. Although AMG 510 isn't a BiTE drug, it's highly anticipated because it targets KRAS G12C, a mutation occurring in 14% of lung adenocarcinomas and about 4% of colon cancers.

Overall, all three companies could pop or drop substantially based upon their ASCO data, so these are high-risk stocks best left to aggressive investors. If you're one of those risk-tolerant investors, then you'll want to pay close attention to the abstracts released today and the takeaways exiting ASCO, which runs from May 31 to June 4, 2019.

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Todd Campbell owns shares of Amgen and Blueprint Medicines. His clients may have positions in the companies mentioned. The Motley Fool recommends Amgen. The Motley Fool has a disclosure policy.