Biotech stocks remain poised to eke out modest gains for 2021 after the stellar gains of the previous year. COVID-19 drug and vaccine developers experienced volatility throughout 2021 amid delays in programs and the reemergence of variant strains.
The year witnessed some watershed regulatory approvals, including Biogen Inc's BIIB Alzheimer's drug, Aduhelm, which passed through the FDA muster amid controversies. Thus far in 2021, about 49 new molecular entities have been approved, signaling that innovation is alive and kicking in the healthcare sector.
Benzinga looked at five biopharma stocks that could be in for a big rebound in the upcoming year. As always is the case, investment in biopharma stocks is fraught with risk and the stock could sway either way in reaction to make-or-break catalysts.
1. Albireo Pharma, Inc. ALBO
Year-to-date Performance: (-35.4%)
Profile: Rare disease commercial-stage biopharma company focused on the development of novel bile acid modulators to treat rare pediatric and adult liver diseases.
Albireo shares have underperformed the broader biotech sector in 2021. Sell-side is optimistic about the stock trajectory and fundamentals going forward.
The consensus rating of analysts is a Strong Buy and the average analyst price target is $76, according to data compiled by TipRanks. This suggests a roughly 200% upside from current levels.
Albireo's lead drug Bylvay, which goes by the generic name odevixibat, has been approved in the U.S. and Europe for the treatment for progressive familial intrahepatic cholestasis, or PFIC. Bylvay is also being evaluated in late-stage studies in Alagille syndrome and biliary atresia.
Earlier this month, the company reported positive topline results from the Phase 1 study of A3907, which is being developed for adult cholestatic liver diseases such as primary sclerosing cholangitis and primary biliary cholangitis. It plans to initiate Phase 2 adult liver disease study in 2022.
Albireo is also evaluating A2342 in viral cholestatic disease.
Albireo expects Bylvay sales of $3 million to $4 million in 2021. As of Sept. 30, the company had cash and cash equivalents of $262.6 million. The company said in its third-quarter earnings statement that it expects its cash reserves to be adequate to fund Bylvay launches and the next stages of the early asset portfolio.
2. ACADIA Pharmaceuticals Inc. ACAD
Year-to-date Performance: (-54.6%)
Profile: Commercial-stage neuroscience-focused biopharma.
ACADIA's woes in 2021 were largely attributable to the FDA's rejection of its regulatory application for expanding the label of its pimavanserin for treating dementia-related psychosis. In early March, when the company announced FDA's communication regarding deficiencies in the application, the stock cratered. The stock lost further luster when the FDA issued a complete response letter for the application in April.
Pimavanserin, under the brand name Nuplazid, has been approved for the treatment of hallucinations and delusions associated with Parkinson's disease psychosis.
On Dec. 20, the company said it plans to resubmit the supplemental new drug application for pimavanserin in the first quarter of 2022, with the proposed indication narrowed from dementia-related psychosis to Alzheimer's disease psychosis.
Pimavanserin is also being evaluated for negative symptoms of schizophrenia in a late-stage study.
ACADIA has another late-stage asset in trofinetide, which has been in-licensed from Neuren Pharma and is being evaluated for Rett syndrome.
Apart from the pimavanserin sNDA filing, the company also expects to report Phase 2 proof-of-concept data for ACP-0544 in post-operative pain in the first quarter of 2022.
As of Sept. 30, Acadia's cash, cash equivalents, and investment securities totaled $540.3 million.
Related Link: How Much Revenue Could Pfizer's Oral COVID-19 Pill Fetch?
3. Rocket Pharmaceuticals Inc RCKT
Year-to-date Performance: (-56.3%)
Profile: Clinical-stage gene therapy company focused on rare childhood disorders.
The consensus rating for the shares of Rocket Pharma is a Strong Buy and the average analysts' price target is $76.25.
The company is developing four gene therapies, with the most advanced investigational assets being RP-L102 and RP-L201. These ex-vivo lentiviral gene therapy candidates are being evaluated in mid-stage trials for Fanconi anemia and leukocyte adhesion deficiency-1, respectively.
Following presentations on these two assets at the American Society of Hematology, Chardan analyst Geulah Livshits increased the launch probabilities of RP-L102 and RP-L201 from 70% to 80%
The pipeline also comprises two Phase 1 investigational therapies: RP-A501 in Danon disease and RP-L301 in pyruvate kinase deficiency.
Rocket Pharma said in its third-quarter earnings statement that its cash, cash equivalents and investments of $421.5 million as of Sept. 30 would be adequate to fund its operations into the second half of 2023.
4. Theseus Pharmaceuticals, Inc. THRX
Year-to-date Performance: (-40%) from the IPO date of Oct. 7
Profile: Biopharma developing targeted cancer therapies.
On average, analysts rate the shares of the company a Strong Buy and the consensus price target is $25, according to TipRanks.
The company has a Phase 1 asset named THE-630 which is being evaluated in gastrointestinal stromal tumors, and two preclinical assets: a fourth-generation EGFR in non-small cell lung cancer and a 3rd kinase target against an undisclosed target.
Theseus received an FDA nod to go ahead with the Phase 1 study of THE-630, the company's lead candidate, in early November. THE-630 is a pan-variant inhibitor of the receptor tyrosine kinase KIT designed for patients with advanced GIST whose cancer has developed resistance to earlier lines of therapy.
5. Xeris Biopharma Holdings Inc XERS
Year-to-date Performance: (-47.4%)
Profile: Biopharma developing and commercializing therapies for ailments related to endocrinology, neurology, and gastroenterology.
The consensus ratings of analysts for the company is a Strong Buy and the average price target is $5.13.
Xeris' two commercially available products are Gvoke, ready-to-use liquid glucagon for the treatment of severe hypoglycemia, and Keveyis, FDA-approved therapy for primary periodic paralysis.
The company has a PDUFA goal date coming up for Recorlev on Jan. 1, 2022. Recorlev is an investigational adrenal steroidogenesis inhibitor in development for the treatment of patients with endogenous Cushing's syndrome.
Since Gvoke is on the market providing stable revenues, the stock is unlikely to see much downside even if the Recorlev decision isn't favorable, SVB Leerink analyst Roanna Ruiz said in a recent note.
Additionally, it has a pipeline of development programs to extend the currently marketed products into important new indications and uses and bring new products forward using its proprietary formulation technology platforms, XeriSol and XeriJect.
As of Sept. 30. Xeris reported total cash, cash equivalents and investments of $93 million.
Screening Criteria Used:
- Down over 20% in 2021
- The average consensus rating of Buy and above
- Impending key catalysts.
- Cash runway
Related Link: 2 Mid-Cap Biopharma Stocks BofA Securities Recommends For 2022
Photo by Julia Koblitz on Unsplash
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