3 Top Biotech Stocks to Buy Right Now[MDGL and VKTX are not the stocks, but are mentioned, the reason this is being posted]
These drug stocks are prescribing some serious growth potential in the years to come.
Sean Williams, Chuck Saletta, and Brian Feroldi
( TMFUltraLong)
Jun 18, 2018 at 11:45AM
The biotech industry could arguably be described as Wall Street's roulette wheel. The odds of successfully bringing a new drug to market are low, which makes investing in biotech riskier than in most industries. However, for those drug developers that are able to overcome the odds, the rewards could be great, both for the developing company and for investors.
With this in mind, we picked the brains of three Motley Fool investors to gauge what biotech stock they believe investors should consider buying right now. Topping the list were mid-caps Intercept Pharmaceuticals ( NASDAQ:ICPT) and Xencor ( NASDAQ:XNCR), as well as biotech blue-chip Celgene ( NASDAQ:CELG).
 Image source: Getty Images.
Is Wall Street overlooking the most promising NASH stock? Sean Williams (Intercept Pharmaceuticals): There's perhaps no hotter space within the biotech industry at the moment than treatment for nonalcoholic steatohepatitis, or NASH. NASH is a liver disease that, if untreated, can lead to fibrosis, liver cancer, and even death. It affects between 2% and 5% of all U.S. adults, is expected to be the leading cause of liver transplants by the middle of the next decade, and has no Food and Drug Administration-approved therapies. Translation: It's a massive opportunity for drug developers and investors.
In recent weeks, a couple of under-the-radar players have wowed Wall Street. Less than three weeks ago, Madrigal Pharmaceuticals ( NASDAQ:MDGL) reported top-line results from its 36-week phase 2 study involving MGL-3196 as a treatment for NASH. Overall, Madrigal's liver biopsy results showed that 70% of patients with a more than 30% fat reduction at week 12 demonstrated a greater than two-point reduction in their NAFLD Activity Score by the 36th week. That was more than double the 32% of patients that demonstrated a similar response by taking the placebo.
The latest updates from Viking Therapeutics for VK2809 for NASH patients have also sent its stock into the stratosphere. Viking's lead NASH drug hopeful works similarly to Madrigal's, thus catapulting its share price.
But what Madrigal Pharmaceuticals and Viking Therapeutics lack, Intercept Pharmaceuticals can provide. Intercept's Ocaliva is already an approved drug for the treatment of primary biliary cholangitis (PBC), and its phase 3 studies in NASH are due to read out in the first half of 2019. With few exceptions, Intercept's NASH competition is somewhere in the range of 30 to 40 months from reasonably bringing a NASH drug to market (assuming success), by my best estimate. A first-to-market advantage in NASH would be nothing short of huge for Intercept and its bottom line.
 Image source: Getty Images.
The concerns surrounding Intercept's lead drug are also overblown. For those who may not recall, Intercept stepped in a big pothole of sorts in September when it came to light that Ocaliva had led to PBC patient deaths. What was often overlooked, though, is that these patient deaths were due to patient or physician dosing errors, as well as the fact that many of these PBC patients were already very sick. In no previous NASH studies involving Ocaliva has there been anything out of the ordinary with regard to adverse events relative to the placebo, with the exception of pruritus, which is a scientific term for "itching."
So, from what I can tell, Ocaliva ran circles around the placebo with regard to NASH resolution and led to a statistically significant reduction in NAFLD Activity Score in the phase 2b Flint trial, and it's on track to potentially make it to market well ahead of its peers. In short, Wall Street is nuts if it overlooks Intercept.
[cut to end - nothing related to NASH]
fool.com |
