Biotech Stocks That Deserve Your Attention After Latest News
Penny stocks are well-known for their high risk & high reward. Volatility, heavy speculation, and other factors can influence the market for these cheap stocks more than their higher price cohorts. But that doesn’t mean they aren’t worth a closer look. While many traders focus on the short-term potential, there’s an entirely different side to low-priced stocks.
That side involves finding companies in their early stages to follow with the hope of long-term growth. Are all penny stocks good investments? Depending on who you ask, that answer varies. However, the short answer is usually no. Many times, the companies trading as penny stocks won’t make it out of their development phase.
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As we saw from the pandemic, even the “best” companies can also become penny stocks. They aren’t development stage companies but falling on hard times can also be why a company trades at levels below $5. Needless to say, in this article, we’ll take a look at a few biotech stocks that once traded as penny stock but have since hit key milestones that have impressed the market and analysts alike. They’ve also come out with big news that could deserve some additional attention heading into the beginning of the month.
Biotech Stocks To Watch After Translate Bio, Sanofi Deal
The biotech industry is well known for volatility. When you’re talking about developing life-changing treatments, there’s a lot to account for. The phase trial process brings the potential for big progress but can also put the brakes on otherwise strong rallies in the market. We recently saw this with companies like Cassava Sciences (NASDAQ: SAVA) and Annovis Bio (NYSE: ANVS), which were also former penny stocks. Both companies developing Alzheimer’s treatments revealed data that didn’t impress the market at all. In response, shares of both stocks plummeted.
The flip side to this is where today’s focus comes into play. In particular, a mega buyout from Sanofi (NASDAQ: SNY) has investors looking at biotech stocks today. If you remember our article, “Top Biotech Penny Stocks On Robinhood To Watch This Week,” we discussed Sanofi and its strengthening relationship with a former penny stock, Translate Bio Inc. (NASDAQ: TBIO).
Sanofi had previously pledged to invest 400 million euros annually in a vaccines R&D facility to advance mRNA vaccines with Translate to benefit. Tuesday, Sanofi formally announced a $3.2 billion buyout of its vaccine collaboration partner. This was at $38 a share in cash, roughly 30% higher than the close on August 2nd.
Immunotherapy Stocks Gain Spotlight In Stock Market This Month
You’ve also got immunotherapy stocks in focus after big news from BioNTech (NASDAQ: BNTX), Bristol-Myers Squibb (NYSE: BMY), and Novartis (NYSE: NVS) recently. All three have jumped recently thanks to new details that’ve surfaced about their respective updates related to cancer treatments. BioNTech has been well-known for its involvement in COVID treatment progress. However, it has gained momentum thanks to new developments for advancing cancer research. Last month the company agreed to acquire Gilead (NASDAQ: GILD) subsidiary, Kite’s neoantigen TCR cell therapy R&D platform and manufacturing facility. The goal of this is to accelerate its cell therapy development in the U.S. for individualized treatments.
On a different note, both Bristol-Myers and Novartis recently gave updates on new FDA updates. Novartis’ NIS793 gained FDA Orphan Drug Designation, while Bristol-Myers’ recent earnings update revealed strong sales figures from its lead cancer drug, Opdivo. This trend of positive pipeline data has continued this week.
Latest Round Of Data Puts Focus On Small Cap Biotech Stocks
This morning, GT Biopharma (NASDAQ: GTBP) announced positive preclinical data from its GTB-5550 B7H3 TriKE treatment candidate. It was found to be effective in multiple cancer cell types. In particular, B7H3 is overexpressed in cancers including non-small cell lung cancer, breast, renal, pancreatic, ovarian, liver, and colorectal cancers. In preparation for filing an Investigational New Drug application with the FDA, GT Biopharma’s GTB-5550 is going through GMP manufacturing scale-up processes.
The important part of this is that early results already demonstrate a positive impact even before the IND has been submitted. This B7H3 protein is a checkpoint molecule, which has very recently become a target for cancer treatment. While things are still in the very early stages for B7 molecules, as a whole, early research is also finding new potential for targeted cancer treatments. For instance, Merck’s (NYSE: MRK) blockbuster drug, Keytruda, and Bristol-Myers’ YERVOY treatments target the same checkpoint inhibitors that are part of the B7 family (PD-1/PD-L1 and CTLA-4/CD80). They’ve also both demonstrated a clear survival benefit when it comes to immune-oncology treatment.
“We are pleased to report our GTB-5550 TriKE™ has passed this important development milestone, and demonstrated effectiveness in promoting redirected and target-specific killing by NK cells.”
Anthony J. Cataldo, GT Biopharma’s Chairman, and Chief Executive Officer
NK Cell Therapy Has Presented New Potential For Cancer Treatment
Natural killer or NK cell therapy isn’t brand new. But it is one of the newer developments in a push for more targeted oncology treatments. Breaking it down to some basics, NK cells can be created to trigger certain immune responses in various patients. These are genetically engineered healthy cells manufactured from normal, healthy donors.
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Since this treatment entails allogeneic cell lines, NK cells can be created to trigger certain immune responses in various patients. These cells “identify” cancer cells on their own as well as in combined with other treatments like CAR-T, a popular, “new age” cancer treatment platform.
In the case of GT Biopharma, it has taken NK cell treatment a step further. The “TriKE” platform is built using tri-specific killer engager cells. This type of therapy combines proteins that bridge an immune cell and a tumor cell then exponentially drive tumor cell killing power. Particularly, the B7H3 TriKE has demonstrated considerable progress combined with other therapies.
This includes Fate Therapeutics’ (NASDAQ: FATE) FT538 iNK cells targeting tumor cells in prostate cancer. An early study showed significant progress. The FT538 alone demonstrated a slight impact on cells in the model. However, when combined with GT’s TriKE, it demonstrated a complete eradication of cancer cells (read more on this specific trial):
TriKEs Are Accelerating Targeted Treatment Development
Data on GT Biopharma’s B7H3 TriKE demonstrates strong pipeline progress. However, it isn’t the only TriKE treatment in the portfolio. GTB-3550 TriKE has demonstrated meaningful results in Phase 1/2 clinical trials in acute myeloid leukemia (AML) and higher-risk myelodysplastic syndrome (HR MDS) patients.
According to the company, initial study results have shown that 57% of patients experienced a “significant reduction in AML/MDS cancer cell burden” when treated with GTB-3550. There was also up to a 63.7% reduction in bone marrow blast levels in some patients. At all dose levels, the treatment was well-tolerated without any adverse events. With potential catalysts to keep track of in the near term, GTB-3550 could also become a core focus. In fact, it has been the center of attention for some analysts tracking GT Biopharma’s progress.
For instance, B. Riley boosted its price target from $21 to $26. Supporting this, the firm said, “Based on the press release and our subsequent conversation with management, we are encouraged by the mounting evidence of clinical activity and the emerging safety profile of lead asset GTB-3550…With the dose-escalation portion of the trial expected to complete towards the end of August 2021, we are raising our probability of success for GTB-3550 in CD33+ acute myeloid leukemia (AML) and higher-risk myelodysplastic syndrome (HR MDS) from 25% to 30%, with a commensurate increase in our 12-month price target.” Read Full Analyst Report Here.
B. Riley joins other firms, including Roth Capital and HC Wainwright, which have both given targets of $25 this year along with their buy ratings.
Biotech Stocks Continue To Draw New Investors
There’s a lot to consider when looking for biotech stocks to add to your watch list. One of the main things to keep in mind is progress. How are these companies advancing their pipelines? Are they reaching milestones and doing so on time? When compared to other industry players, how does their treatment or pipeline stack up? However you find those answers, biotech companies typically deserve additional attention especially considering 1 phase trial result can be the difference for a big move up or down depending on the data. It also doesn’t hurt that it’s become one of the hottest industries for funds to flood money into.
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Look back at where large positions (via 13F filings) were built. Biotech has stood out for years. According to data from WhaleWisdom, Sector Allocation has shown a strong trend in favor of Health Care related companies:
The green bars represent 13F allocation over time and a focus on Health Care investments, specifically. Institutional investment managers file 13Fs each quarter. These investors exercise investment discretion over at least $100 million in 13F securities. So this is where you’ll hear about “whales” being in stocks as it refers to larger investors. Given the stage that has been set by very recent developments from more than just a handful of big biotech companies, this industry could be one of the main areas of focus for some right now.
Pursuant to an agreement between Midam Ventures LLC and GT Biopharma (GTBP) Midam has been paid $150,000 for a period from March 1, 2021, to April 1, 2021. This compensation is payment 1 of 12 as part of a 12-month agreement between Midam Ventures LLC & GT Biopharma (GTBP), for a period from March 1, 2021, to February 28, 2022. Midam Ventures LLC expects to be paid $150,000 per month for a total of 12 months by GT Biopharma (GTBP). Midam has been paid an additional $150,000 for a period from April 2, 2021, to May 1, 2021. This compensation is payment 2 of 12 as part of the Agreement. Midam has been paid an additional $150,000 for a period from May 2, 2021, to June 1, 2021. This compensation is payment 3 of 12 as part of the Agreement. Midam has been paid an additional $150,000 for a period from June 2, 2021, to July 1, 2021. This compensation is payment 4 of 12 as part of the Agreement. Midam has been paid an additional $200,000 for a period from July 2, 2021, to July 29, 2021. This compensation is payment 5 of 12 as part of the Agreement. Midam has been paid an additional $200,000 for a period from July 29, 2021, to September 2, 2021. This compensation is payment 6 of 12 as part of the Agreement. We may buy or sell additional shares of GT Biopharma (GTBP) in the open market at any time, including before, during, or after the Website and Information, to provide public dissemination of favorable Information about GT Biopharma (GTBP). Click here for full disclaimer.
