Big Pharma gets the headlines at ASCO, but smaller up-and-coming biotechnology companies also produce breakthroughs in the treatment of cancer. Let’s see which two biotechs made their presence known at this year’s ASCO.
Expanding a Growing Well-Diversified Cancer Fighting Drug
Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) is a $7 billion biotechnology company that has seen gains of 115% over the last year. The company has three approved drugs – all in the treatment of cancer – and has a strong partnership with Bayer.
The company’s most promising product is Nexavar, currently approved for both liver and kidney cancer, a drug that has produced sales of almost $900 million in 2012. In addition to Nexavar’s current indications, the company is testing the product in four clinical studies, with one being thyroid cancer.
At ASCO, Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) presented stellar Phase 3 results for Nexavar in the treatment of thyroid cancer – the most aggressive form of the disease – if approved it will face almost no competition in the market. In the Phase 3 study, Nexavar slowed progression of thyroid cancer by five months compared to placebo. Thus, the primary endpoint was met, and the company will now seek regulatory approval.
What’s encouraging about Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) is that Nexavar is already approved for two different types of cancer, and is widely used among oncologists. An approval for thyroid cancer is all but a slam dunk, and currently it is a huge unmet need in the treatment of cancer. Therefore, I would anticipate sales growth from Nexavar sooner rather than later.
In recent months, analysts have already reported that Nexavar is seeing some off-label use for thyroid cancer – but now after reporting positive data, I expect that physicians will begin using the drug for the disease on a regular basis. As a result, I’d watch Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) closely, as it further commercializes and expands this well-diversified cancer fighting drug.
Solidifying the Potential of HyperAcute at ASCO
NewLink Genetics Corp (NASDAQ:NLNK) has seen a one-month 23% gain, leading up to ASCO. NewLink Genetics Corp (NASDAQ:NLNK) is a $400 million company with an advanced pipeline in the treatment of cancer, including six current studies.
At ASCO, the company announced Phase 2 data on its lung cancer drug tergenpumatucel-L, a single agent that is being used to salvage chemotherapy efficacy in previously treated patients. The study included 28 previously treated patients with metastatic or recurrent non-small cell lung cancer (NSCLC).
For a single agent, tergenpumatucel-L performed exceptionally well, with a median overall survival of 11.3 months (three-and-a-half months better than standard-of-care). Furthermore, the response rate to the drug was 31%, which is much better than the 10% seen in currently available cytotoxic chemotherapies in previously treated patients.
The mechanism used in tergenpumatucel-L is to stimulate the immune system to recognize and destroy cancer cells. Tergenpumatucel-L is part of the company’s HyperAcute platform, which is composed of human cancer cells that are tumor-specific. The company is testing its HyperAcute platform on five total cancers, with pancreatic cancer being its most advanced.
So far, all data from the HyperAcute platform has been positive – and as each trial advances it informs investors that NewLink Genetics Corp (NASDAQ:NLNK)’s approach is seeing success, meaning large revenue potential. Tergenpumatucel-L alone is estimated to have peak sales north of $600 million, and its Phase 3 pancreas HyperAcute drug (Algenpantucel-L) is believed to have peak sales of $500 million.
With NewLink Genetics Corp (NASDAQ:NLNK) continuing to demonstrate success with its HyperAcute line – and having a market cap of only $400 million, I believe there is great upside potential in the stock. While I do not know how the stock will respond to data at ASCO when the market opens on Monday, I do think that the results were encouraging. I also think it points to a bright future for the company’s HyperAcute technology platform, a future in which I want to be present.
Conclusion
There’s no denying that Bristol Myers Squibb Co. (NYSE:BMY) and Merck & Co., Inc. (NYSE:MRK) stole the show at ASCO with their anti-PD1 drugs; a new class of cancer fighting agents that build on the success of immunotherapies. However, with more than $200 billion being spent annually on cancer and nearly 600,000 Americans expected to die this year alone from the disease, there is a great deal of opportunity for various companies to succeed in this industry.
In biotechnology, companies focusing on cancer therapeutics have seen the largest gains over the last five years – because of its market size and because it is an underdeveloped space. Prior to Dendreon Corporation (NASDAQ:DNDN)’s Provenge, we had seen very few advancements in the treatment of cancer – in the preceding three decades – but now we are seeing more strides toward a cure than ever before.
The reason for our success is a change in approach to immunotherapy and cell targeting therapeutics. NewLink Genetics Corp (NASDAQ:NLNK) Genetics and Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) are two companies in this realm. Although different in size, both companies have a technology that is being used to treat numerous cancers. As both companies advance with continued success, I’d watch both stocks closely, and would anticipate further gains in the quarters and years ahead.
The article Two Diversified Biotechs to Watch After Impressive ASCO Data originally appeared on Fool.com.
Brian Nichols is long NewLink. The Motley Fool has no position in any of the stocks mentioned. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
