Last Month, three stocks soared 24% or more. This isn’t unusual for biotech investments, but are these jumps justified, and should you be investing in these stocks too? Some of the three biggest moves in the week of February 24 were Voyager Therapeutics, Fate Therapeutics, and Odonate Therapeutics.
Voyager Therapeutics’ shares soared almost 50% higher. This can be attributed to the company receiving help from drug producer AbbVie. This collaboration was announced on February 20 and is supposed to help the companies develop treatments for Alzheimer’s disease and other neurodegenerative diseases. Voyager will be given $69 million in upfront payments and has the opportunity to gain up to $155 million in preclinical and phase 1 milestone payments. Also, Voyager could receive $895 million per vectorized tau antibody if the key development and regulatory milestones are reached, and they would gain any tiered royalties on commercial sales.
Voyager has one clinical program that received approval from the FDA to advance to a phase 2/3 clinical study. This study is to find a treatment of advanced Parkinson’s disease. Voyager also has several preclinical candidates, some of which Sanofi has secured licensing option rights.
This deal with AbbVie will help both companies as Voyager benefits from an influx of cash and AbbVie gets to enhance its neuroscience pipeline, which includes an experimental Alzheimer’s disease drug in phase 2 testing.
Fate Therapeutics’ shares went up 45%. This was a continuation of a six-month streak in which the biotech’s market cap has tripled. This progress is due to the announcement of an early-stage clinical study, FATE-NK100, a natural killer (NK) cell cancer therapy. On February 20 the first patient was treated in a phase 1 study combining FATE-NK100 with either Herceptin or Erbitux in treating advanced solid tumors. Both of these drugs are monoclonal antibody chemotherapies, which are commonly used in chemotherapy.
The immunotherapy is also in a couple of other clinical studies target treatment of acute myelogenous leukemia and ovarian cancer. This treatment shows potential for patients whose monoclonal antibody therapy has failed. Many believe that the combination of the NK cell cancer therapy with monoclonal antibody drugs could be more effective than the single-drug treatments.
Odonate Therapeutics stock rose 24% last month. Insider biotech investing by Odonate’s CEO Kevin Tang is the cause for the jump. Tang bought $2.9 million worth of shares on February 16 and $1.1 million on February 22.
It appears that Tang is hopeful about Odonate’s pipeline candidate, tesetaxel. Chemotherapy is being considered in a late-stage clinical study for the treatment of metastatic breast cancer. Tesetaxel is in a class of drugs known as taxanes, many of which are approved to treat cancer. However, tesetaxel comes in a pill and doesn’t require intravenous administration. This could make tesatexel a huge hit on the commercial market.
Phase 3 of the study on tesetaxel began in December; However, results on how well the drug performed most likely won’t be available until 2020.
Should you buy?
Now the question everyone wants has been answered. Whether you’re entering cannabis investing, real estate investing, or biotech investing you want to feel confident in your decision. While all of the companies above have some potential, all of these biotech stocks are still in a clinical stage, without products on the market. For many, this is too risky because the odds of failure are still very high. While you can be cautiously optimistic about these stocks, now may not be the best time to buy these stocks.