Identifying Growth Opportunities within Battered Biotech Sector
New York, New York – After a rocky start to 2016 the Biotechnology Industry began to show signs of stability in April. The iShares NASDAQ Biotechnology Index ETF (NASDAQ: IBB) gained 2.74 percent in the month of April, but is still down 21.0 percent year-to-date, while the SPDR S&P Biotech ETF (NYSEARCA: XBI) gained 1.45 percent, down 22.0 percent year-to-date. On April 6th, the iShares NASDAQ Biotechnology Index ETF spiked 5.99 percent, the largest daily gain in over 7 years, on volume that was nearly triple its 30-day average.
Some companies in the Biotechnology Industry may have been oversold in recent months as investors have dumped their higher risk investments as confidence began to wane in the overall markets. Here are two companies we believe to have some potential upside for investors.
Novavax, Inc. (NASDAQ: NVAX) is a clinical-stage vaccine company committed to delivering novel products to prevent a broad range of infectious diseases. Novavax’s lead product candidate is a vaccine for respiratory syncytial virus (RSV) that is already participating in a couple of phase 3 studies. In addition, the company has two flu vaccines and an Ebola vaccine in its current pipeline.
MacroGenics Inc. (NASDAQ: MGNX) is a clinical-stage biopharmaceutical company focused on discovering and developing innovative monoclonal antibody-based therapeutics for the treatment of cancer, autoimmune disorders and infectious diseases. The company’s two lead product candidates are margetuximab, an anti-HER2 antibody that is being evaluating in a Phase 3 clinical trial in patients with metastatic breast cancer, and enoblituzumab, an anti-B7-H3 antibody that the company believes has the potential to treat a variety of different tumor types.
Access our free in-depth equity report on Novavax here!
On March 6th, Barron’s published a research report written by Wedbush analysts that suggested Novavax could triple due to its strong RSV and flu programs. Wedbush reaffirmed an “outperform” rating on the stock with a price target $14.00 a share. Wedbush anticipates “R&D expense will decline after the respiratory syncytial virus (RSV) season in the second and third quarters” and that the $230.7 million in cash Novavax held at the end of 2015 to be “sufficient to see it through filing of Biologics License Application application for its RSV-F vaccine in older adults and into 2018 at least.”
As of March 31, 2016, the company had $433.9 million in cash and cash equivalents and marketable securities. Novavax is expected to report top-line data from its pivotal Resolve trial, which is a Phase 3 RSV F Vaccine trial in older adults, in the third quarter of 2016.
Shares of MacroGenics Inc. (NASDAQ: MGNX) surged 16.74 percent to close at 21.06 a share on May 18th. The stock traded between $19.84 and $22.35 on volume of 1.19 million shares traded. The company announced that it has entered into a collaboration and licensing agreement with Janssen Biotech, Inc. for its cancer treatment MGD015.
“MGD015 is a promising product candidate that employs MacroGenics’ proprietary DART platform to enable a potent redirected T-cell killing mechanism with ‘off-the-shelf’ convenience. This approach is already being evaluated in five other clinical-stage DART programs,” said Scott Koenig, M.D., Ph.D., President and CEO of MacroGenics. “Janssen represents the ideal partner for MGD015, given its track record of successfully developing and commercializing transformative oncology therapies. This collaboration builds on an existing Janssen relationship around MGD011, a DART molecule targeting CD19 and CD3, which is now being evaluated in the clinic.”
Three Companies We Believe Have Better Growth Potential Than Novavax and MacroGenics!
There is no denying that some of the largest profit makers have come from the Biotech Industry in recent years. Over the past 5 years the iShares NASDAQ Biotechnology Index ETF has gained approximately 250.0 percent, far outpacing the S&P 500 Index rise of roughly 60.0 percent over the same period. Sorting through the infinite amounts of information for the next big winner is almost an impossible task for the average investor. Luckily, we take the hard work, time, and effort off your shoulders. Click here to learn more about our top three Biotech stocks!