3 BIOTECH STOCKS LEADING THE CHARGE AGAINST BREAST CANCER

The shocking death of actress Kelly Preston has really put the spotlight on breast cancer. It is estimated that there will be approximately 279,100 new cases in 2020 alone, 15-20% of them being HER2-positive.  In 2018, the market was valued at $19.02 billion, and is scheduled to grow at a CAGR of 10.7% over the forecast period, reaching approximately $40.47 by 2026–a by-product of the rising prevalence of the disease. Capitalizing on this market is essential for any biotech investor, particularly since novel therapies are emerging rapidly. Below are 3 biotech companies that are leading the way in terms of breast cancer treatment development. 

By Juliette Duguid, Biotechnology Strategist

Pfizer

Pfizer is a well known giant in the biotech industry–the American multinational pharmaceutical corporation is focused on developing and producing innovative medicines and vaccines. Recently, the FDA approved their drug Talzenna, a PARP inhibitor for patients with a germline BRCA mutated, HER2-negative breast cancer. The 431 person, randomized trial used patients that were previously treated with anthracycline and/or some taxane. They were able to get this drug by acquiring biotech company Medivation in 2017. 

That being said, Pfizer has had its fair share of difficulties. In late May, the stock dropped 8.2% after the company concluded that continuing with phase III of their trial for palbocilib, a drug that was supposed to be used in conjunction with their largely successful drug Ibrance and endocrine therapy. In a statement, Pfizer CEO indicated that palbocilib was “…unlikely to show a statistically significant improvement”. While Pfizer isn’t the type of company that will struggle significantly as a result of a single drug setback, it was still viewed as a disappointment because there were high expectations for this drug collaboration.

Despite these recent harships, nothing can really permanently faze the biotech giant. According to a company factsheet, they are “…uniquely positioned to deliver advances for various tumor subtypes to women living with breast cancer around the world through our R&D strength, innovative approaches to clinical trials, strategic partnerships, and continuous support of numerous research-focused grants on a global scale”. Although past performance is not always an indicator of future success, with Pfizer, that certainly seems to be the case. Their R&D expenditures as of March 31st, 2020 for the year were $8.671 billion, which is a 8.85% increase year over year. This, coupled with the fact that they have several other mergers on the horizon, means that they continue to profit off of not only the breast cancer market, but all types of cancers and diseases. 

Seattle Genetics

Although only recently introduced into the world of breast cancer treatment, Seattle Genetics is already making very big strides. They recently received FDA approval on their drug Tukysa, when taken in conjunction with the Roche drug Herceptin and another chemotherapy drug called capecitabine for patients with metastatic, HER-2 positive breast cancer. The prerequisite for being able to take the drug is having undergone one or more anti-HER 2 therapies, which is “a much broader studied indication than the studied population” according to Andrew Berens, an analyst at Leerink Partners. The study involved using patients who had previously undergone at least two courses of anti-HER 2 therapies. Results indicated that patients who used TUKYSA in combination with trastuzumab and capecitabine had, on average, a 46% reduction in the risk of progression of their cancer or death, compared to people who just received trastuzumab and capecitabine on their own. 

Chief of the Division of Breast Oncology Eric P. Winer said, “With highly significant and clinically important results for overall and progression-free survival, the addition of TUKYSA to trastuzumab and capecitabine has the potential to become a standard of care for people with HER2-positive metastatic breast cancer…TUKYSA is well tolerated by patients and is a valuable addition to the agents…” The drug’s FDA approval came approximately 4 months early, and will thus allow the drug to reach more patients faster. 

According to CEO Clay Siegall, the drug will be priced at $18,500 for a supply lasting 30 days, with the average course of treatment totalling around $111,000 per patient. All in all, revenues for this drug are expected to be around $1.6 billion.

Oncolytics Biotech

Oncolytics Biotech is a Canadian company founded in 1998 and based in Calgary, Alberta. The penny stock is currently worth just under $2.00 and trades on NASDAQ. It is currently developing an immuno-oncolytic virus delivered intravenously called pelareorep, aimed at the treatment of solid tumors and hematological malignancies. This treatment is unlike any on the market–the virus enters select cancer cells and replicates, causing the cell to die.  In late June, the company announced the first dosing of a patient in a three arm phase II BRACELET-1 study aimed at supporting a previous successful phase II study that showed a survival rate of almost double with pelareorep, as a result of priming of an adaptive immune response. They are set to go into phase III trials in early 2020. 

Oncolytics Biotech has recently entered into a partnership with Pfizer and Merck, where they are looking to develop IP via new studies. They are exploring combining pelareorep with BAVENCIO to treat patients with HR+/HER2- metastatic breast cancer, and have entered into a BRACELET-1 study.  In a conference call, Oncolytics CEO Matt Coffey said “…the BRACELET-1 study is strategically important for a number of reasons…it allows us to collaborate with two of the world’s leading pharma companies…it also provides Oncolytics with the opportunity to confirm the highly encouraging survival data from our phase 2 IND 213 study…” The high-profile nature of this partnership will undoubtedly bring Oncolytics to the public eye, which will help fule future products and partnerships.

The specific segment of the biotech industry that Oncolytics Biotech is entering into is checkpoint blockade immunotherapy. Essentially, an immune checkpoint inhibitor is a type of drug that blocks checkpoints that are made by certain types of immune system cells. These checkpoints can often prevent T-cells from killing cancer cells. Thus, when these checkpoints are blocked, the body can fight cancer more effectively by allowing for easier killing of cancer cells. This sector is actually the fastest growing in the immuno-oncology, with a CAGR of 20.1%, and is projected to reach a value of $56.5 billion by 2025. 

The bottom line is that capitalizing on the breast cancer drug market with cheap stocks, like Oncolytics Biotech, is a smart move. They seem to be priming themselves to become giants in the industry by entering into a sector where there is much money to be made, and doing so with unique and innovative technologies.