At the annual ASCO meeting in Chicago, thousands of health-care researchers and professionals unite to advance cancer treatment. This year’s meeting takes place next weekend, and its presentations will be important not only to those who work in cancer research, but also to Wall Street. Here are three promising stocks I’ll be watching closely as the conference unfolds.
Dendreon’s Provenge made waves in the treatment of cancer as a true medical breakthrough when it effectively used the immune system to fight cancer. Now, the next generation of immunotherapy is taking this practice one step further – keeping cancer cells from being able to hide from the immune system.
The new class of drugs, which act against cellular signals known as PD-1 and PDL-1, are being developed by Bristol Myers Squibb Co. (NYSE:BMY), Roche, and Merck. Personally, I am most excited to see Bristol Myers Squibb Co. (NYSE:BMY) present data on its Phase 3 drug nivolumab, which is closest to reaching the market. (Its FDA approval is expected in late 2014 or early 2015.)
Nivolumab has the potential to treat a vast array of cancers. At ASCO, Bristol Myers Squibb Co. (NYSE:BMY) will be presenting data for a Phase 1 study of nivolumad combined with Yervoy to treat melanoma. In a 52-patient study, patients with advanced melanoma saw an overall tumor shrinkage rate of 40%.
However, the company’s most advanced study with nivolumab is in treating advanced non-small cell lung cancer. There, it produced an overall survival of 9.6 months, which is 30% better than standard-of-care. It’s also produced a 22-month overall survival rate in patients with advanced kidney cancer; compared to 20 months for the current standard of care. Thus, I am excited to see what the company produces regarding this drug at ASCO.
I am anxious to hear the company’s remarks and its outlook for the drug when used both alone and with Yervoy. If it works effectively on three major cancers, nivolumab could not only save lives, but also produce great revenue.
For lung cancer alone, the drug is expected to produce sales north of $1 billion. Add melanoma, kidney cancer, and its combination with Yervoy, and Bristol Myers Squibb Co. (NYSE:BMY) could bring in as much as $5 billion annually. Considering that the company as a whole booked $16.2 billion in revenue over the last 12 months, that makes nivolumab a very important drug for its future.
Making A Big Entrance Into The Cancer Space
Gilead Sciences, Inc. (NASDAQ:GILD) is widely considered the most transcendent pharma company in the sector. It has gained this reputation by developing drugs that are far greater than anything else on the market for the treatment of hepatitis C and HIV. Now, the company is trying its luck in oncology — with its development of idelalisab for patients with advanced chronic lymphocytic leukemia (CLL).
On average, patients that qualify for idelalisad have tried and failed five other treatments. Any drug that succeeds where so many other therapies have failed must be remarkable indeed.
And while idelalisad’s study on CLL is only in Phase 1, its abstract for the study showed that patients saw a 56% rate of tumor shrinkage, and that 81% had a lymph node response. This is very important, considering that all forms of leukemia attack lymph nodes.
Many expect that because of Gilead Sciences, Inc. (NASDAQ:GILD)’s success in HIV and hepatitis C, that it will one day be just as successful in developing products to treat cancer. Idelalisad is its first attempt, but will be closely monitored on Wall Street, especially since the company’s also developing the same drug as a treatment for advanced hepatocellular carcinoma (HCC) and non-Hodgkins lymphoma, other types of cancer.
An Under-The-Radar Company To Watch
While big pharma is all set to dominate this year’s ASCO, Halozyme Therapeutics, Inc. (NASDAQ:HALO) offers a small-cap option for biotech hunters.
Trading at a market cap of $830 million, Halozyme Therapeutics, Inc. (NASDAQ:HALO) has a candidate, PEGPH20, that is turning heads with its efficiency against the most deadly forms of cancer known to man: stage IV metastatic pancreatic cancer.
Again, the drug is only a Phase 1 candidate — but it has already announced data showing a 42% response rate. The company also announced that it is now advancing into Phase 2 studies for PEGPH20 in combination with chemotherapy.
Halozyme Therapeutics, Inc. (NASDAQ:HALO) is still several years from having PEGPH20 approved, but is lucky enough to have more than $100 million in cash and partnerships with the likes of Baxter, Pfizer, and Roche. Overall, I say this is a promising under-the-radar company worth watching.
Conclusion
As an investor who has covered biotechnology for the last eight years, I can’t remember when ASCO was more dominated by large cap pharma companies, instead of small-cap players.
With that said, I consider this year just as exciting as any year of the past, since we could see the birth of new blockbuster products like past successes Herceptin and Avastin. Just because large companies are announcing data, that doesn’t mean their drugs won’t produce gainst for shareholders. In five years, it is very possible that we’ll look back on this year’s ASCO as the start of a new era with blockbuster products. That’s an era I don’t want to miss.
The article 3 Stocks to Watch Ahead of ASCO originally appeared on Fool.com.
Brian Nichols is long GILD. The Motley Fool recommends Gilead Sciences. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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