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It has been an eventful year for the volatile biotech sector, which has been in the spotlight from the onset of 2020, owing to the coronavirus outbreak. The Nasdaq Biotechnology Index witnessed a roller coaster ride with a 28.4% gain in the year so far, riding the coronavirus wave.
Needless to say, the development of coronavirus vaccines and treatments has been in the forefront throughout 2020 and gained further steam, of late, as the second wave of the pandemic grapples the world, resulting in more and more fatalities with each passing day. Desperate times call for desperate measures. Hence, biotech companies are running a race against time and currently evaluating every possible weapon in their arsenal to combat this outbreak. While most companies are developing vaccines to prevent the spread, a few like Regeneron are also working to develop antibodies for the virus. Any positive update in this regard has led to a surge in the share price of the respective company.
Given the alarming levels of spread and an urgent need for a vaccine, the FDA recently granted emergency use authorization (EUA) to Pfizer/BioNTech’s mRNA-based vaccine, BNT162b2, against COVID-19 in individuals 16 years of age or older. The agency has also granted EUA to Moderna’s MRNA COVID-19 vaccine, mRNA-1273, in individuals 18 years of age or older. While the development of a vaccine has definitely taken center stage, regular pipeline and regulatory events are now more or less back on track as the outbreak had resulted in a delay in key FDA decisions and the postponement of important studies.
Quite a few new drug approvals and label expansions of prominent drugs kept the momentum for some biotech companies. Key approvals include Ayvakit, Tazverik, Zeposia, Tukysa, Pemazyre and Oxlumo, among others.
While mergers & acquisitions were the key highlights for the sector in 2019, the momentum somewhat slowed down earlier this year but is gradually picking up the pace. Shares of biotech giant, Alexion ALXN, which primarily focuses on rare diseases, surged more than 30% after the recent announcement of a definitive agreement with U.K.-based pharmaceutical company, AstraZeneca plc, whereby the latter will acquire the former for a total consideration of $39 billion or $175 per share. Earlier, Gilead Sciences, Inc. grabbed oncology company, Immunomedics, for $21 billion.
Quite a few biotech companies have done well in 2020 so far, apart from the ones riding the coronavirus wave. Approval of a key candidate, positive data readouts, encouraging pipeline progress and favorable regulatory updates can lead to a massive surge in the share price of a biotech company.
As the year is coming to an end, let’s do a quick recap of the outperformers in the biotech sector. Here we list five companies, which have seen their prices double over the year. These stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cambridge, MA-based Acceleron Pharma, Inc. XLRN is a biopharmaceutical company, focused on the discovery, development and commercialization of therapeutics to treat serious and rare diseases. It has been a good year for Acceleron as the FDA approved its first drug, Reblozyl (luspatercept-aamt), in November 2019 for the treatment of anemia in adult patients with beta-thalassemia who require regular red blood cell or RBC transfusions. This has boosted the growth prospects of the company significantly. The initial uptake of the drug has been encouraging. The label expansion of the drug, being developed in collaboration with Bristol-Myers Squibb Company, further adds to the prospects. The company’s progress with its other pipeline candidate, sotatercept, has been encouraging as well.
Shares of the company have surged 154.6% in the year compared with the industry’s growth of 9.8%.
San Diego, CA-based Fate Therapeutics FATE is a clinical-stage biopharmaceutical company, which is focused on the development of programmed cellular immunotherapies for cancer and immune disorders. Positive pipeline updates on its innovative immunotherapies have boosted the company’s share price in 2020. It recently released encouraging data from its phase I study of FT596, its universal, off-the-shelf, CD19-targeted chimeric antigen receptor (CAR) natural killer (NK) cell product candidate. Fate announced positive interim data from its dose-escalation phase I study of FT516 in combination with rituximab for patients with relapsed / refractory B-cell lymphoma. Meanwhile, to develop its pipeline, the company entered into a collaboration and option agreement with Janssen Biotech, Inc., a unit of Johnson & Johnson to develop iPSC-derived CAR NK and CAR T-cell product candidates for the treatment of cancer. Investors cheered the news, given J&J’s strong position in the space.
Shares of the company have surged 376.6% in the year.
Novato, CA-based Ultragenyx Pharmaceutical Inc., RARE is a biopharmaceutical company focused on the identification, acquisition, development and commercialization of novel products for the treatment of serious rare and ultra-rare genetic diseases. Its biologic products include approved therapies Crysvita (burosumab) and Mepsevii (vestronidase alfa). Growth in Crysvita has been robust this year. The FDA approval of Dojolvi for the treatment of pediatric and adult patients for all forms of LC-FAOD has fueled the top-line. The company’s collaboration with Solid Biosciences to develop and commercialize new gene therapies for Duchenne Muscular Dystrophy is a positive too as it diversifies its pipeline.
Shares of the company have surged 293.4% in the year.
Editas Medicine, Inc. EDIT is a leading genome-editing company. The pipeline progress has been encouraging in the year for this company, which is focused on translating the power and potential of the CRISPR/Cas9 and CRISPR/Cas12a (also known as Cpf1) genome-editing systems into a robust pipeline of treatments for people living with serious diseases around the world. It recently submitted an Investigational New Drug (IND) application to the FDA for the initiation of a phase I/II study of EDIT-301, an experimental, autologous cell therapy medicine under investigation for the treatment of sickle cell disease. Shares of the company appreciated significantly after it announced encouraging preclinical data on EDIT-301 and the successful development of its large-scale manufacturing process.
Shares of the company have surged 117.6% in the year.
Amicus Therapeutics FOLD also focuses on discovering, developing and delivering novel medicines for rare diseases. The company’s Galafold (also referred to as "migalastat") is the first and only approved oral precision medicine for people living with Fabry disease and strong demand for the drug has boosted sales. The pipeline progress has been encouraging as well. The company recently initiated the rolling Biologics License Application (BLA) submission to the FDA for AT-GAA, its investigational two-component therapy for the treatment of late-onset Pompe disease (LOPD).
Shares of the company have surged 146.1% in the year.
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Alexion Pharmaceuticals, Inc. (ALXN) : Free Stock Analysis Report
Moderna, Inc. (MRNA) : Free Stock Analysis Report
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