These Three Biotechs Have the Right Mix as the Industry Gains
As the State Street SPDR S&P Biotech ETF gains momentum, let's check stocks with recent positive news flow.
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Markets rebounded from their sharp losses on Tuesday by the end of the holiday-shortened trading week. All the major indexes ended Friday, down slightly for the week, even after over 2% selloffs in the Nasdaq and S&P 500 on Tuesday. One sector of the market that continued to show momentum last week was biotech with the State Street SPDR S&P Biotech ETF (XBI) up a bit over 3% last week.
M&A activity has seen a notable uptick since September and has been a primary driver of the substantial surge from the sector over the past four months. In today’s column, I am going to circle back on some small-cap names that have been highlighted on these pages or on the Daily Diary before and that have seen some recent positives.
Corcept Pharmaceuticals (CORT) saw an overdue bounce back in the markets last week. Management announced Thursday that a late-stage trial for relacorilant, its experimental therapy for ovarian cancer, had reached its primary goal. Data showed the candidate reduced patients’ death risk by 35%. This news triggered a couple of analyst firms to bump up their price targets on the shares, and the stock moved up 25% in trading late last week.
I haven’t touched on Greenwich LifeSciences, Inc. (GLSI) since mid-September. This clinical stage biotech company is one of more high risk/high reward positions in my portfolio. It is only appropriate for risk tolerant investors. Soon after my last piece on it, the company added another trial site in Ireland for its pivotal Phase 3 study evaluating its lead immunotherapy candidate GLSI-100 to prevent breast cancer. Last week, the shares continued to rally as the Food and Drug Administration gave the green light the first commercially manufactured lot of the active ingredient in this therapy for use in this study.
Beam Therapeutics Inc. (BEAM) has been on the move over the past two months. Management presented at the big JP Morgan Healthcare confab earlier this month and provided an update around the progress of advancing its liver-targeted genetic disease and hematology franchises within its pipeline. This triggered a half dozen buy reiterations from analyst firms including Bank of America and Bernstein. The company is attempting to advance gene editing with a more precise approach.
The name requires some patience, but the company’s diverse pipeline is moving forward, and Beam is sitting on just over $1 billion in cash and marketable securities on its balance sheet. This cash hoard positions Beam to continue to advance its candidates. The company’s technology platform and approach have attracted deep- pocketed collaboration partners like Pfizer (PFE) .
At the time of publication, Jensen was long BEAM, CORT, GLSI, PFE and XBI.
