4 Drug Stocks That More Than Doubled This Year
The Medical sector went through a tough phase in 2022. Despite signs of early recovery in the first half of the year thanks to high vaccination and immunization rates, macroeconomic headwinds like rising inflation and currency rate fluctuations had an unfavorable impact on major economies. As a result, quite a few companies bore the brunt of this slowdown as prices took a hit.
To curb the effects of inflation in the United States, which have been at a record high since the 70s, the U.S. Fed has been hiking interest rates at frequent intervals. All these efforts are being taken to avoid the signs of a global recession, which seems apparent in the near future. Though these decisions aim to curb rising inflation, this is strengthening the U.S. dollar, leading companies that generate ex-U.S. product revenues to record a fall in international sales due to lower exchange rates. This trend is expected to continue in the upcoming few quarters.
Also, the world is on the brink of yet another COVID-19 wave owing to the rise of new evolving Omicron subvariants like BQ.1 and BF.7. Hence, the macroeconomic outlook is expected to be more uncertain in the near future. Currently, new drug approvals, pipeline development and an increase in M&A activity maintain investor sentiment for the overall healthcare sector.
Our Choices
As we approach a New Year with a highly volatile market, let us take a good look at the stocks like AVEO Pharmaceuticals AVEO, Cabaletta Bio CABA, Verona Pharma VRNA and Wave Life Sciences WVE, which provided more than double returns in 2022.
Also, the selected stocks currently carry a Zacks Rank #2 (Buy). The stocks have been witnessing favorable earnings estimate revisions as well. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AVEO Pharmaceuticals
In the year-to-date period, the share price of AVEO Pharmaceuticals, a cancer biotech, skyrocketed 218.6% against the industry’s 22.5% decline.
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AVEO’s rise is mainly attributable to the company’s recent all-cash buyout offer by LG Chem for $15 per share, amounting to a total of $566 million. Prior to the above announcement, the firm’s share price also rose after it announced that the National Comprehensive Cancer Network (NCCN) updated its clinical practice guidelines to elevate its recommendations for AVEO’s sole-marketed drug Fotivda to Category 1 status as a subsequent therapy for renal cell carcinoma (RCC) patients who have received at least two prior systemic therapies.
In the past 60 days, estimates for AVEO Pharmaceuticals’ 2023 earnings per share have risen from 46 cents to 52 cents.
Cabaletta Bio
Shares of Cabaletta Bio have surged 144.6% in the year so far against the industry’s 22.5% decline.
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Cabaletta’s pipeline currently has only one clinical candidate in its pipeline – DSG3-CAART – which is being evaluated in an early-stage study as a potential treatment for patients with mucosal pemphigus vulgaris (mPV).
In October, Cabaletta acquired an exclusive worldwide license for CABA-201, a pre-clinical CD-19 CAR T cell therapy targeting autoimmune diseases, from IASO Biotherapeutics. An investigational new drug (IND) application is expected to be filed with the FDA by first-half 2023. Subject to the IND clearance, CABA expects to report initial clinical data evaluating this candidate in first-half 2024. Following the acquisition of this license, share price spiked as multiple company insiders, including the company’s CEO and board of directors, purchased the company’s common stock, which boosted investor morale and confidence in it.
Verona Pharma
Shares of Verona Pharma have skyrocketed 263.2% in the year so far against the industry’s 22.5% decline.
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The stock rose particularly due to the company’s successful development of a nebulized form of its lead pipeline candidate ensifentrine to treat chronic obstructive pulmonary disease (COPD). Earlier this month, VRNA announced that a late-stage study evaluating nebulized ensifentrine in COPD achieved its study goal. Based on this outcome, a regulatory filing for the candidate in COPD is expected in first-half 2023.
In the past 60 days, estimates for VRNA’s 2023 loss per share have narrowed from $1.48 to $1.11.
Wave Life Sciences
Shares of Wave Life Sciences have surged 123.0% in the year so far against the industry’s 22.5% decline.
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Wave Life Sciences is a clinical-stage company focused on developing treatments targeting genetically defined diseases. This rise in share price is particularly attributable to the rapid development of pipeline candidates – WVE003 (for Huntington's disease), WVE-N531 (for Duchenne muscular dystrophy) and WVE-004 (for C9orf72-associated amyotrophic lateral sclerosis and frontotemporal dementia).
Earlier this month, WVE entered into a four-year strategic collaboration with GSK to advance the discovery and development of oligonucleotide therapeutics. GSK will pay $170 million as an upfront payment to WVE, with the latter being eligible for future milestone payments and royalties.
In the past 60 days, estimates for WVE’s 2023 loss per share have narrowed from $1.68 to $1.46.
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AVEO Pharmaceuticals, Inc. (AVEO) : Free Stock Analysis Report
WAVE Life Sciences Ltd. (WVE) : Free Stock Analysis Report
Verona Pharma PLC American Depositary Share (VRNA) : Free Stock Analysis Report
Cabaletta Bio, Inc. (CABA) : Free Stock Analysis Report
