There are very few areas of investing that are as exciting and dynamic as pharmaceutical and biotech companies. These firms have the incredible potential to revolutionize health care and save lives. They operate at the forefront of medical innovation and are truly expanding the boundaries of science. At any moment, a pharmaceutical company might develop a new, highly effective treatment for cancer, heart disease, diabetes or any other debilitating condition.
Make no mistake, buying pharmaceutical stocks can be a risky proposition. There’s no way to know in advance if a new drug is going to work, or if it’s going to prove safe enough to gain Food and Drug Administration approval. If a new treatment fails clinical trials or turns out to have dangerous side effects, its stock will get hammered, and investors will stand to lose big. But, there’s another side to that coin.
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If a company does develop a dramatic new drug and successfully brings it to market, the potential rewards to the stock investor can be incredible. It’s not unusual to see a stock jump significantly — 5% to 10% or more — on positive news about a drug it’s working on. And as Wall Street and the wider market begin to realize the commercial potential of a new treatment while it inches closer and closer to market, the gains can continue.
For aggressive investors who are willing to accept volatility in exchange for the possibility of dramatic gains, here are five pharmaceutical stocks with potential blockbuster drugs in the pipeline:
— Vertex Pharmaceuticals Inc. (ticker: VRTX)
— Regeneron Pharmaceuticals Inc. (REGN)
— Bristol-Myers Squibb Co. (BMY)
— AstraZeneca PLC (AZN)
— BioNTech SE (BNTX)
Vertex Pharmaceuticals Inc. (VRTX)
VRTX is a $106 billion, Boston-based company that’s focused on developing drug treatments and specialized therapies for many ailments including diabetes, sickle cell disease, hypertension, muscular dystrophy and cancer.
On Feb. 5, 2024, the company announced encouraging results from what it described as a pivotal trial for a three-drug combination treatment for people suffering from cystic fibrosis. The drug cocktail, which consists of three drugs called vanzacaftor, tezacaftor and deutivacaftor, was tolerated well and showed good results in patients over six years old. The hope is that early treatment in younger patients can stop disease development.
Of more immediate interest to stock investors, however, is a developmental medicine it calls VX-548. The drug is designed to treat acute neuropathic pain. The important point about VX-548 — and what sets it apart — is that it is a non-opioid medicine. Given the opioid addiction crisis in the U.S. and around the world, VX-548 has huge commercial potential. The drug has reached late-stage clinical trials, and the company plans to submit it for FDA approval by mid-2024.
Regeneron Pharmaceuticals Inc. (REGN)
REGN is a $105 billion pharmaceutical and biotech company that, according to Wall Street estimates, should generate $13.9 billion in revenue in 2024 — a 6.1% increase from 2023. It accomplished those huge numbers by developing drugs and medicines for many different diseases, with a special focus on diseases such as macular degeneration and arthritis.
This month, REGN secured FDA approval for Praluent to treat children with a genetic form of high cholesterol. Praluent can be used in patients as young as eight years old. This will be a real help to children who have cholesterol problems and should boost the company’s revenue as it begins to market the treatment.
A potential blockbuster in Regeneron’s pipeline is odronextamab. This is an experimental antibody treatment being developed to treat follicular lymphoma and diffuse large B-cell lymphoma.
According to the Leukemia & Lymphoma Society and the Lymphoma Research Foundation, there are more than 33,000 new cases of these types of lymphoma diagnosed every year in the U.S. alone. It’s not hard to see how this treatment, which is scheduled for an FDA-approval decision in March, could make a huge impact on the health of cancer sufferers and the company’s bottom line.
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Bristol-Myers Squibb Co. (BMY)
BMY is a $105 billion global leader in the health care sector and generates about $11 billion a quarter in revenue.
On March 15, the FDA’s Oncologic Drugs Advisory Committee voted positively that BMY’s myeloma drug, Abecma, showed a favorable risk/reward profile for patients with refractory multiple myeloma. The vote brings Abecma one step closer to market. That’s excellent news for cancer sufferers and for the company.
Pharmaceutical investors are also focused on BMY’s immunotherapy drug, Opdivo. This innovative cancer treatment is what’s known as an immune-checkpoint inhibitor. The treatment is designed to use the human immune system to generate an anti-cancer immune response.
Opdivo was first approved by the FDA in 2014, with multiple indications added in the time since, the latest of which came on March 6 for a type of carcinoma.
AstraZeneca PLC (AZN)
AZN has a staggering market cap of about $203 billion, and Wall Street estimates that the company will generate $50.8 billion in revenue this year, up 10.9% over 2023. This biopharmaceutical giant develops, manufactures and markets prescription medications around the world.
In January 2022, AZN entered into a collaboration agreement with a privately held Swiss company, Neurimmune, to bring a new cardiomyopathy treatment called NI006 to market. Cardiomyopathy is a debilitating disease of the heart muscle, and AZN has high hopes for this new immunotherapy treatment as it moves through the pipeline.
A more immediate blockbuster drug prospect for AZN is Imfinzi. Imfinzi, more formally known as durvalumab, blocks certain proteins which allow a cancer patient’s immune system to attack and kill cancer cells. This drug has already been FDA approved for several types of cancer and is in multiple clinical trials for additional cancer types. The impact on the world of cancer treatment and on the stock price could be significant.
BioNTech SE (BNTX)
BioNTech has a $21 billion market cap, and Wall Street is estimating that the company will take in about $3.4 billion in revenue for the full year 2024.
BNTX is a German biotech firm that’s on the cutting edge of immunotherapy cancer treatment development. It has more than a dozen new treatments in various stages of the clinical trial process. The new drugs in their pipeline are for the treatment of cancers such as prostate cancer, small-cell lung cancer and melanoma.
Several of their new drugs have the potential to be blockbusters but one is of particular interest because it’s being tested for the treatment of two distinct cancer types. The working name for the drug is ONC-392 and it’s in mid-phase clinical trials for the treatment of ovarian cancer and early trials for the treatment of solid tumors.
If ONC-392 proves effective against one or both of those ailments, the stock could react very positively.
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5 Pharmaceutical Stocks With Blockbuster Drugs in the Pipeline originally appeared on usnews.com
