U.S. biotech stocks are off to a strong start this week. It didn’t take long for investors to get over the Fed’s forecast for interest rate hikes by 2023 which rattled the markets late last week.
Concerns of inflation and sooner than expected rate increases have largely subsided allowing the major averages to climb higher. The Dow Jones Industrial Average had its best day in more than three months on Monday with cyclical energy, industrial, financial, and transport stocks leading the way. All 11 sector groups advanced to start the week, a sign of broad-based market strength.
With the markets seemingly back in “risk-on” mode volatile biotechnology stocks have been among the biggest movers and shakers.
The biotech industry includes a range of companies that research, develop, manufacture, and market therapies to treat human diseases. Their processes are typically based on some form of genetic analysis and engineering.
As a group biotechnology stocks are up approximately 8% this year which lags the broader S&P 500 year-to-date return of 12.5%. However, the gap has closed considerably in the last few weeks thanks to some big biotech headlines including the FDA’s controversial approval of Biogen’s Alzheimer’s disease treatment. Risk-seeking investors have also been rotating out of struggling cryptocurrencies and into biotech.
Here at Insider Financial, we have a keen interest in the biotech space because the life-changing nature of its products can translate to life-changing gains for investors.
Today we highlight four of the most intriguing biotech stocks generating buzz across social media platforms.
The first two, AMRN and AVXL trade on the Nasdaq. The next two are up-and-coming OTC penny stocks.
BIOTECH STOCKS TO WATCH #1 AMRN
Headquartered in Dublin, Ireland, Amarin Corp. (AMRN) is a commercial-stage pharmaceutical company focused on cardiovascular disease. Many of its treatments are based on omega-3 fatty acid which is an essential oil our bodies aren’t able to produce.
Amarin has the only drug on the market called Vascepa. It has been approved in the U.S. and Europe to treat patients with high LDL-cholesterol and severe hypertriglyceridemia, conditions associated with increased risk of stroke, heart attack, and heart disease.
Last year Vascepa sales, Amarin’s main revenue source, were up 42% to $607 million. They are expected to exceed $650 million in 2021.
The European approval was granted in March 2021, so revenue results have yet to reflect the potential of the European market. Vascepa’s European debut is expected to happen by the end of the third quarter of 2021 starting with Germany. Amarin thinks Vascepa can become a multi-billion dollar blockbuster heart medication over time.
Unfortunately for the company, generic companies are now permitted to seek approval for generic versions of Vascepa following a district court ruling. In November 2020 the first generic version of the drug was launched by Teva Pharmaceuticals and Apotex putting downward pressure on the stock. Generic approvals for Dr. Reddy’s Laboratories and Hikma Pharmaceuticals soon followed.
AMRN rallied from there on hopes the company’s Supreme Court appeal would be successful. However, in February 2021, Amarin lost the appeal—and the stock has since trended lower.
The company was dealt another setback this week. The Supreme Court denied Amarin’s bid to overturn a March 2020 District of Nevada ruling that invalidated Vascepa’s core patents.
Still, momentum has built up over the past four weeks with increased attention on the company’s growth prospects. In that period, AMRN is up about 7% compared to 3% for the industry.
Aside from the upcoming launch of Vascepa in Europe, the stock could get a boost from a leadership change. On August 1st, the retiring President & CEO John Thero will give way to current Amarin executive Karim Mikhail.
Amarin has a strong balance sheet that contains no debt and $519 million in cash. This should support its ability to pursue growth in the global cardiovascular market that includes more than 200 million people in the U.S. and Europe alone.
BIOTECH STOCKS TO WATCH #2 AVXL
Anavex Life Sciences (AVXL) has been one of the most discussed biotech stocks at Insider Financial. It has also been one of the biggest winners for Insider Financial subscribers.
We’ve repeatedly praised the company’s ANAVEX2-73 product as one of the most promising drugs in development.
AVXL is on the run again having more than doubled off its March 13th low.
Earlier this month ANAVEX2-73 appeared in a peer-reviewed publication. The journal discussed the drug candidate’s ability to induce autophagy, a cell regeneration process that has been found to be defective in patients with Alzheimer’s disease, Parkinson’s disease, and other central nervous system disorders.
On June 16th we alerted Insider Financial subscribers to the increasing social media chatter around this development. That can be found here.
The elevated message board activity has spilled over into this week.
On June 21st, the company announced that ANAVEX2-73 showed positive biomarker correlating efficacy data in a phase 2 clinical trial for the treatment of patients with Rett Syndrome. Patients that received ANAVEX2-73 achieved higher scores in the Rett Syndrome Behavioral Questionnaire as well as improvements in balance, mood, and repetitive hand behavior. The drug candidate is said to activate the key Sigmar1 receptor resulting in “the restoration of complete housekeeping function within the body”.
The continued progress with the drug helped AVXL gap up and run as high as $27.85 on Monday.
As often happens with biotech stocks, the positive clinical headline was followed by news of an add-on equity offering. On Tuesday the company announced a $50 million direct offering agreement with Deep Track Capital at $21.00 per share.
AVXL pulled back a bit in response but expect more positive news around its lead candidate to dictate the longer-term uptrend.
BIOTECH STOCKS TO WATCH #3 RGBP
Regen Biopharma (RGBP) made a huge run in April 2021 and may be gearing up for another.
We wrote about the stem cell therapy specialist soon before it went on the 2,370% run. The company had just signed a pair of promising deals with Oncology Pharma. You can read that story here.
RGBP has since remained active in the press and social media circles. Some investors have speculated that a Regen-Oncology marriage is afoot. Precigen has also been rumored to be a potential acquirer. Who knows if an acquisition will happen, but Regen is generating plenty of buzz on its own.
The company is developing stem cell-based treatments for diabetes, heart-related illness, circulatory issues, and COPD. It is also working on small molecule therapies that target cancer and autoimmunity.
Much of the chatter is still around the two potential multi-million dollar licensing deals between Regen and its KLS subsidiary and Oncology Pharma. Regen was granted a 15-year exclusive right and license for the development and commercialization of its intellectual property (IP) related to pancreatic cancer treatment. The IP includes antigen-specific cancer vaccines in which modified mRNA is administered to produce the desired immune response.
The RGBP posts have been pouring in frequently on iHub this week. This is often a precursor for a ramp in trading volume.
Investors are eagerly awaiting the company’s updated regulatory filings including 10Q and 10K reports that will allow it to uplist to the OTCQB pink current tier. Again, some on social media are saying the push to get filings complete is to prepare for a takeover.
Regen is a tiny biotech with massive growth potential—and a penny stock to hang onto for the long haul. Over time, the company has the potential to commercialize its therapeutic pipeline and monetize its 20-plus patents bringing big rewards to patient shareholders.
Between an uplisting, a potential buyout, and progress with its diverse pipeline, RGBP is definitely one low float biotech stock to keep on the radar.
BIOTECH STOCKS TO WATCH #4 SBFM
We’ve written about Sunshine Biopharma (SBFM) on several occasions.
Back in January, the OTC biotech stock secured $2 million in funding to develop its COVID-19 treatment in addition to its lead oncology therapy targeting pancreatic cancer. With a Nasdaq uplisting in mind and multiple early-stage trials imminent, we felt SBFM was poised for a major run. That article can be found here. Eight sessions later, SBFM ran from less than a dime to 30 cents.
Another big run took place in May 2021 when the Canadian biotech surged more than 60%. Towards the end of the month, the company shared more detail around the action mechanisms of its Adva-27a anticancer drug. We learned that the drug actually has two active mechanisms, the evasion of P-glycoprotein and the inhibition of Topoisomerase II. The former is the protein most commonly responsible for multidrug resistance in more than 50% of all cancer types. The latter is a DNA unwinding enzyme used by cancer cells to multiply.
Well, they say good things happen in threes. Based on the intensifying social media conversation and upswing in the stock, SBFM looks ready for a third run.
Lately, attention has shifted back to Sunshine’s COVID-19 program. On June 9th, the company announced that its oral COVID-19 treatment study of mice was moving along as expected. The study is being conducted at the University of Georgia to assess the efficacy of two protease inhibitors to prevent mice infected with SARS-CoV-2 from dying. If it goes well, Sunshine plans to request FDA authorization to do testing in human COVID-19 patients.
Sunshine Biopharma CEO Dr. Steve Slilaty commented, ” We are moving the project forward as fast as possible, albeit within the constraints of science. We are optimistic that our research efforts will culminate in a drug that will help turn the page on the pandemic.”
With exciting developments around oncology and coronaviruses, we think Sunshine is a dual-threat penny stock with bright long-term growth prospects.
As we keep saying, there are always opportunities in the markets and it’s our job to find winning penny stocks for our subscribers. Huge gains can be made in such a short amount of time.
If you like any of these 4 biotech stocks, our best advice is to be patient and throw bids in below the market. Buying dips and selling rips as swing trades remains the best strategy.
It’s also important to look for penny stocks that have yet to run. There are plenty of opportunities out there and we screen hundreds of penny stocks each week looking for the best alerts for our subscribers.
Remember, all it takes is one or two to become a winner and you’ve crushed the market indices for the year.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.