ASCO 2014 Put These Biotech Stocks in Focus

This article was originally published by Zacks.com.

It has been a busy few days in the healthcare sector with several companies presenting data on their approved and experimental oncology drugs at the annual meeting of the American Society of Clinical Oncology (ASCO). The meeting, held in Chicago from May 30 to June 3, provides companies with a platform to showcase their data to scientists, physicians, the investment community, and others.

This year, a main area of focus was immuno-oncology, which has been attracting a lot of interest. Immuno-oncology therapies have the potential to change the treatment paradigm for cancer—they basically use the natural capability of the patient's own immune system to fight the cancer.

Major players in this field include Bristol-Myers Squibb (BMY), Merck (MRK), and Roche (RHHBY)—all 3 companies came out with data on their immuno-oncology candidates at ASCO 2014. Merck seems to have a head start with pembrolizumab (MK-3475) currently under FDA review for advanced melanoma (a response is due by Oct. 28).

Bristol-Myers presented encouraging early-stage data on a combination of its investigational PD-1 immune checkpoint inhibitor, nivolumab and Yervoy. The one-year and 2-year overall survival (OS) rates in advanced melanoma patients were 94% and 88%, respectively. This data looks good—according to the company, the average survival rate in the late-stage of this aggressive cancer has historically been just 6 months with a one-year mortality rate of 75%. But toxicity remains an issue. This combination is already being evaluated in phase II and phase III studies.

Meanwhile, Roche has been making good progress with its immunotherapy anti-PDL1, MPDL3280A, which reduced tumors in 43% of patients suffering from a specific type of metastatic bladder cancer. Plus, the company got Breakthrough Therapy Designation from the FDA for MPDL3280A, which could cut short the development time.

Outside the immuno-oncology area, impressive data was presented by companies like Pharmacyclics (PCYC) and AbbVie (ABBV).

AbbVie’s experimental leukemia drug, ABT-199/GDC-0199, continues to impress. An overall response rate of 84% was seen in relapsed/refractory chronic lymphocytic leukemia (CLL) patients treated with ABT-199/GDC-0199 plus Rituxan in a phase Ib study. AbbVie also presented preliminary results from an ongoing phase I study on ABT-414, which is being evaluated for glioblastoma multiforme, the most common and most aggressive type of malignant primary brain tumor.

Meanwhile, Pharmacyclics continues to generate strong data on Imbruvica. Biotech major, Amgen (AMGN), was also at ASCO 2014 with data on AMG 337, rilotumumab and talimogene laherparepvec.

Biotech stocks in focus

Armed with data presented at ASCO 2014, this seems like a good time to pick a few biotech stocks that look poised for growth.

Gilead Sciences Inc.

Foster City, CA-based Gilead Sciences Inc. (GILD)., which is known for its drugs targeting HIV, hepatitis B virus infections, chronic hepatitis C virus (HCV) infections, oncology/inflammation, and serious cardiovascular and respiratory conditions, presented encouraging data on idelalisib at ASCO 2014.

A second interim analysis of a phase III study evaluating idelalisib and Rituxan for relapsed CLL showed significant improvement in progression-free survival (PFS) and overall response rate compared to placebo plus Rituxan, with acceptable safety. Idelalisib is under priority review for this indication with a response expected by Aug. 6.

Chances of gaining approval look high considering the data on the candidate. Idelalisib is also under review for the treatment of refractory indolent non-Hodgkin’s lymphoma (PDUFA date: Sep. 11).

The strong performance of HCV drug, Sovaldi, potential catalysts, and an attractive pipeline make this Strong Buy stock a solid pick.

AbbVie

North Chicago, IL-based AbbVie has a presence in the rheumatoid arthritis, psoriasis, Crohn’s disease, HIV, cystic fibrosis, testosterone, thyroid disease, Parkinson’s disease, ulcerative colitis, and chronic kidney disease markets. However, with flagship drug Humira accounting for a major part of revenues, the company has been working on reducing its dependence on Humira and is working steadily on building a strong pipeline.

ABT-199/GDC-0199 is currently in pivotal phase II and phase III studies for several types of cancer. The ASCO data looks good and bodes well for the continued development of the candidate.

Pharmacyclics

Sunnyvale, CA-based Pharmacyclics is best known for its recently approved cancer treatment, Imbruvica, which is approved for previously-treated chronic lymphocytic leukemia and mantle cell lymphoma.

Pharmacyclics was at ASCO 2014 with data on Imbruvica from several studies. But the standout data was from the phase III RESONATE study—a head-to-head comparison between Imbruvica and GlaxoSmithKline’s Arzerra. Patients with previously treated chronic lymphocytic leukemia or small lymphocytic lymphoma experienced a significant improvement in PFS, overall survival and overall response rate when treated with Imbruvica.

Imbruvica, which has blockbuster potential, delivered sales of $56.2 million in its first full quarter on the market. It is being developed for a wide range of tumor types and label expansion would bring in additional revenues.

Honorable mention

We would also like to mention New York-based biopharma company Bristol-Myers, which focuses on the discovery and development of medicines targeting serious diseases in the field of oncology, neurosciences, immunology, cardiovascular, and virology.

With the buzz surrounding immuno-oncology, Bristol-Myers is an obvious choice. It is one of the lead players in the field of immuno-oncology with nivolumab being evaluated for different types of cancer. Nivolumab, if approved, has the potential to bring in multi-billion dollar sales for the company.

All these companies made waves at ASCO 2014 and sport strong fundamentals.

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