Last Updated on May 2, 2019 by Chris Stang
Last week turned out to be a positive one for the Healthcare Sector and the greater market. The XBI (SPDR S&P biotech ETF) gained 3.5%. The IBB (iShares Nasdaq biotech index)and FBT (First Trust Biotech ETF) gained 2.5% each. Friday was a big day for U.S markets with the S&P 500 setting another all-time high close at $2,939.88. Despite fears of weakening economic performance by federal analysts, 1Q gross domestic product (GDP) beat expectations coming in at 3.2% growth.
A healthy economy means consumers spend more money, thus companies generate more revenue, and as long as interest rates stay low are more inclined to expand business operations. The result? Higher earnings and higher stock prices. While some are worried about a recession coming we disagree and are bullish about the U.S. markets in 2019. Last week big several big pharma companies reported earnings including but not limited to Bristol-Myers Squibb (BMY), Celgene (CELG), BioMarin (BMRN), Abbvie (ABBV), and Biogen (BIIB). Among whom earings were strong. Revenues grew handsomely and guidance for 2020 was optimistic. My biggest concern for next week is the House meeting on Universal Healthcare. I do not believe anything will come of this but there is no telling how the Healthcare sector will react on Monday in anticipation for the meeting nor afterward.
Here are some biotech companies with catalysts and earnings to watch next week. At the end of the article, I’ll list the companies I am watching closest for swing trades.
Clinical-Stage Companies With Catalysts
- Adaptimmune (ADAP) $4.83
- Summarizing its SPEAR T-cell program at ASCGT at 10:15 am ET on Wednesday, May 3rd.
- ADAP is down considerably from $14 bucks a share in May 2018.
- The drug under discussion is a phase 1 compound (MAGE-A4) and is being developed for the treatment of solid tumors.
- Cytokinetics, Inc (CYTK) $9.19
- Phase 2 data is being presented at AAN at 1:15 pm ET on CYTK drug Reldesemtiv being developed for Amyotrophic lateral sclerosis (ALS).
- Traded flat for the past year. Its 52-week range is $5.75-$10.44.
- CYTK is collaborating with AMGN in a phase 3 trial for heart failure.
- Nabriva Therapeutics (NBRV) $2.77
- PDUFA date on 4/30/19 for its drug Contepo for treating Complicated urinary tract infections.
- NBRV ran up quite a bit already into the PDUFA date and is a high-risk play in my opinion at this point.
- Declined a lot since April 2018 when it was ~$5.0.
- Ovid Therapeutics Inc (OVID) $1.93
- Phase 2 data is being presented May 7th at AAN for OV101 for Adolescents with Angelman syndrome.
- A phase 3 study is planned for the 2nd half of 2019.
- Steadily declined in the past year. In May 2018 OVID traded near $10.
- This week could be a good time to accumulate. I could see the price increasing 10-20% in anticipation for the conference.
*Neurocrine Biosciences, Inc (NBIX) $77.42- Trading near a 52-week low. ER could change the trend back up. Interestingly, the last time NBIX hit these levels were around the same time in 2018 and it bounced running up to $122 (Sept. 2018) before declining to its present price. NBIX Develops treatments for neurological and endocrine-related diseases.
*Amgen, Inc (AMGN) $181.47- A big pharmaceutical company. It 1Q performance and 2020 guidance should contribute to the general investor sentiment in healthcare. AMGN is trading approximately midway between its 52-week high and low. I am personally interested to see how their cancer treatment commercial assets are performing.
*EXACT Sciences Corporation (EXAS) $97.69- Trading very close to its 52-week high of $99.52. One year ago around this time, EXAS traded near $40.0. This tells me they have had increasing revenues, positive clinical develops, and or some combination of successes on these fronts. It will be interesting to see how 1Q19 earnings are and if EXAS can break $100 per share.
*Incyte Corporation (INCY) $75.03-Trading near its 52-week high of $88.83. INCY is up roughly 20% since this time in 2018. INCY has only one FDA approved product in Jakafi (Ruxolitinib) and is a chemotherapy drug indicated for myelofibrosis (MF) and polycythemia vera (PV). A second product Iclusig (Ponatinib) is EMA-approved for the treatment of chronic myeloid leukemia and CML with a specific gene mutation (T315I). INCY is developing Jakafi for additional diseases and has a host of novel compounds in the pipeline as well.
*Eli Lilly And Co (LLY) $119.87- Trading near its 52-week high of ~$132 and up considerably in the past year. In May 2018 LLY traded in the $80 range. LLY is one of the largest biopharmaceutical companies in the world with a diverse product portfolio.
*Merck (MRK) $76.63- MRK has been steadily gaining over the past year. Its 52-week high is $83.85. I larger driver of growth is attributable to MRK’s blockbuster immuno-oncology drug Keytruda. It seems like every week I read of a new FDA approved combination therapy for cancer involving Keyrtuda.
*Pfizer (PFE) $39.97- Has a relatively tight 52-week range ($34.37-$46.47) and is trading closer to the low. From the low of $34.37 (May 2018) to a high of $46.47 (November 2018), a 7-month period, PFE gained 35%. Since April 1st PFE declined 6% to its current share price. From 2015 through 2018 revenue increased from $48.9 MM to $53.6 MM. Analysts project a slight decline in sales growth in 2019 and a 2% increase in 2020. A earnings surprise next week could give PFE some positive price action.
*Vertex Pharmaceuticals Incorporated (VRTX) $172.85- Has traded side-ways most of the past year with a moderate incline. Its 52-week range is $144.07-$ $195.81. VRTX is an American Bio-pharmaceutical company and the first to use a strategy of rational drug design in lieu of combinatorial chemistry.
*ACADIA Pharmaceuticals Inc. (ACAD) $25.17- Is up ~$13 bucks in the past year from its 52-week low of $12.77. ACAD has an FDA approved product NUPLAZID® (pimavanserin) for the treatment of hallucinations and delusions derived from Parkinson’s disease. Analysts are expecting substantial sales growth over the coming years. For 1Q19 analysts project sales revenue around $60 MM up 24% from last year and a subsequent increase of 44% through 2020. Pimavanserin is in phase 3 for three additional indications and phase 2 for one indication. Earnings could have some catalytic info about 1Q19 sales, 2019 or 2020 guidance, and positive developments regarding its clinical stage assets. The consensus 12-month price target for ACAD among analysts is $40.60.
*Alnylam Pharmaceuticals, Inc. (ALNY) $87.06- Has traded flat in the past year with an overall downward trend. Its 52-week high is $124.22. From 2017 to 2018 gross profit declined ~16 MM. Analysts and shareholders are going to be paying close attention to guidance from management.
*Amarin Corporation plc (AMRN) $19.33- Is one of the hottest stocks in the biotech sector. In September 2018 AMRN skyrocketed from ~$3.0 to $12 and then a high of ~23 by November. Analysts have a 12-month consensus price target of 38.67. For more info see Chris Stang’s article about AMRN earnings and or one of our previous articles on AMRN by Jason F.
*ArQule, Inc. (ARQL) $6.05- Is trading up over +200% from its 52-week low of $2.23. ARQL is a clinical stage pharmaceutical company with 4 products in the pipeline. Its most advanced product Derazantinib (ARQ 087) is a FGFR inhibitor for the treatment of Bile Duct cancer. They have a license agreement with Basilea Pharmaceutica International Limited (Basilea, SIX: BSLN) to commercialize Derazantinib in Japan, Europe, the US, and the rest of the world except China, and Taiwan.
*Exelixis Inc (EXEL) $20.55- Has traded flat in the past year with an overall downward trend. From 2017 to 2018 EXEL nearly doubled their gross profit from $438.5 MM to $828.6 MM. From 3Q18 to 4Q18 revenue increased modestly. It’ll be interesting to see if there was an uptick in sales in 1Q19 and the companies guidance for 2019 and 2020. EXEL has an impressive pipeline.
*GlaxoSmithKline Plc (GSK) $40.50- A British Multinational pharmaceutical company. They have a market cap of $100.75 billion. Aside from many commercial products they have an interesting pipeline including a universal flu vaccine and several phase 3 HIV medications. In July 2018 GSK announced a new approach for drug development harnessing genetics and advancements in technologies to target improving immune function.
*United Therapeutics Corporation (UTHR) $104.89- Has traded sideways for the year with an overall downward trend.
*Acorda Therapeutics Inc (ACOR) $11.02- Has declined significantly in the past year. Its 52-week range is from $10.55 to $36.35. ACOR has two commercial products AMPYRA and INBRIJA. The former is to improve walking ability in adults with multiple sclerosis (MS) and the latter for adults as needed for OFF episodes with Parkinson’s. ACOR has 3 additional products in its pipeline. Since 2015 gross profits declined over $20 MM.
* Gilead Sciences (GILD) $65.15- Has traded relatively flat and downward in the past year. The company’s primary focus has been on developing anti-viral treatments for HIV, Hepatitis B, and influenza. GILD’s Selonserbib is being evaluated for NASH in phase 3 clinical study. Earlier this year data from said trial met its primary endpoint for one dose but the second dose failed to hit it. GILD has a host of other clinical assets for diseases in oncology, inflammation/respiratory, liver disease, Ebola, and HIV/Aids. Since 2015 gross profit has declined a little over $10 MM.
*Ironwood Pharmaceuticals, Inc (IRWD) $12.20- Has traded steadily downward in the past year reaching a 52-week high of $21.20 and descending to today’s price level. IRWD has one commercial product Linzess approved for Irritable bowel syndrome with constipation and chronic idiopathic constipation. Linzess comes with a boxed warning of serious dehydration in pediatric patients.
*Pacira Biosciences Inc (PCRX) $40.02- Has traded with a wide set parabola. It was valued around $33.10 in May 2018 and peaked at $55.0 in September and subsequently declining to its current price. PCRX has 3 commercial products. EXPAREL is a non-opioid local analgesic prior to surgery to reduce postsurgical pain lessen the use of opioids need to control pain. Iovera is a handheld device used to deliver controlled dosages of cold temperature to targeted nerves, limiting the nerve’s ability to relay pain signals to the brain. DepoFoam is a capsule for drugs and enables the compounds contained to be released over a specific period of time. Additional, PCRX has several ongoing clinical trials (PLAY, FUSION, CHOICE). From 2015 through 2018 gross profit increased $102 MM. Slower revenue growth over this period could be a factor for its sideways price movement.
*SAGE Therapeutics Inc (SAGE) $168.69-Has a V-shaped 1-year chart. In May 2018 it was valued around $144 per share and from there traded sideways before declining to a low of $79.88 in December 2018 and recovering to its current price. SAGE focuses on developing treatments for Depression. SAGE clinical compounds target key mood receptors in the brain GABA and NMDA. At a glance, it appears a lot of potential has been priced into SAGE. They are losing money (i.e. not profitable). In 2018 they generated $90.3 MM in revenue but saw -$191.8 MM in gross profit. In other words, they lost $191.8 MM for the year.
Top Tickers To Watch For Swing-Trade
ADAP, OVID, NBIX, PFE, ACAD, AMRN