As we head into the new year festivities, our thoughts are already focused on a number of opportunities in biotech stocks during the coming weeks. Here are a couple of stocks with PDUFA dates looming, and a quick look at the drugs in question.
Genmab A/S (OTCMKTS:GMXAY)
First up, Genmab. This company is off the radar for a lot of individual investors, mainly because it’s based in Denmark and trades over the counter in the US, but don’t let that fool you. It has a market cap just shy of 48 billion, and generates nearly $100 million revenues annually from two FDA approved drugs – both of which target oncology indications. One of these drugs, Darzalex, the FDA approved just last month, and on the approval the company’s market capitalization got some swift upside. On January 22, the FDA will rule on Arzerra, for a chronic lymphocytic leukemia indication, and if it gets the green light, Genmad should strengthen again. The drug is part of a family of drugs called monoclonal antibody – a family that has garnered much attention from oncology researchers over the last few years – and works by attaching itself to receptors on the surface of B-cells, the cells in our immune system that become cancerous in leukemia sufferers. Once attached, it signals the rest of a patient’s immune system to attack, and in doing so, initiates an immune response that trials have shown reducers tumor size and kills cancerous cells. It is already approved for a chronic leukemia indication (this one is relapsed leukemia) and so the latest NDA is really just an extension of the current application. Having said this, it’s an extension that will widen the patient market and – perhaps more importantly – open the door for further indication. Indeed, the company is already trialing a number of these applications, with ongoing studies in MS, Lymphoma and neuromyelitis.
With these sorts of oncology candidates, the FDA generally seeks the opinion of an advisory board. With this in mind, keep an eye on any releases ahead of the date in question to gain insight into this board’s recommendation and – in turn – the drug’s chances of approval on the 22nd. One to watch.
Neos Therapeutics, Inc. (NASDAQ:NEOS)
Shifting to the other end of the biotech spectrum, let’s now look at Neos. Neos has a market cap of a little over $200 million, a relatively condensed pipeline, and only one drug commercially available – a combination therapy for pediatric ADHD. It’s a risky one, but there’s also plenty of upside potential, especially if the FDA gives the nod for its lead pipeline candidate next month. The PDUFA is set for January 27, and the drug in question is NT-0202. Just as with the company’s marketed product, NT-0202 is an ADHD target – but this one is proprietary to Neos. The company picked up the currently available product as part of an asset acquisition back in 2014 from its then-rights holder Chiesi USA and Coating Place, Inc.
NT-0202 is an amphetamine product, which is pretty common in the pediatric ADHD space, but what sets it apart is its sustained delivery feature. Sustained delivery reduces the number of doses necessary for effective administration – an especially handy feature in restless kids, and something that has no comparable in the current marketplace.
The latest NDA is actually a resubmission – Neos initially proposed the drug to the FDA back in 2013. However, the agency responded to the initial application with a complete response letter (basically a note that outlines issues with the NDA) requesting some fresh data. Alongside the resubmission, Neos stated that it believes it had met the data requirements, and the FDA issued its standard 6-month resubmission timeframe. Those 6 months are up on Jan 22nd – a date that could mark the end of a highly scrutinized road to approval for Neos and NT-0202. We probably won’t get an advisory panel recommendation on this one, so all ones on the agency going forward. Approval is far from guaranteed – the FDA is notoriously (and understandably) tough on pediatric therapies – but if NT-0202 gets a thumbs up, it will be a big payday for Neos shareholders. Again, definitely one to keep an eye on.