3 bursting biotech stocks -- 1 to buy

The biotech industry is notorious for its pop-and-drop nature, but for risk tolerant investors there can be opportunities. For instance, these three companies are tumbling in the past month and risk tolerant investors may want to consider buying one of them. In the following slideshow I explain why these biotech companies are falling and what action investors can consider taking.

Published in: Health & Medicine

3 bursting biotech stocks -- 1 to buy from The Motley Fool

Transcript

• 1. 3 Bursting Biotech Stocks – 1 to Buy Source: Achillion Pharma
• 2. 1. Zafgen, Inc. (NASDAQ: ZFGN) Zafgen, Inc. is a clinical stage biotechnology company researching weight loss drugs for the treatment of obesity and complex metabolic disorders, including Prader-Willi syndrome.
• 3. Here’s What You Need To Know •Initiated phase 3 of beloranib for Prader-Willi last September. •Cash of $115.5 million (12/31). •Plus $129.5 million in January thanks to a secondary stock offering. •Lost $36.5 million in 2014 vs. $14 million loss in 2013. •Guiding for cash of $145 million exiting ‘15. •Competitive market: •Arena’s Belviq. •Vivus’ Qsymia. •Novo Nordisk’s Saxenda. •Orexigen’s Contrave. •Contrave interim cardiovascular data released March 3. •Patients taking Contrave had fewer heart attacks than patients taking a placebo. Shares are tumbled 16% in the past month.
• 4. Fool-worthy thoughts A hyper competitive market yet to generate significant sales for any of these existing therapies and preliminary Contrave data that could be a differentiator make Zafgen too risky for me to own.
• 5. 2. Acceleron Pharma Inc. (NASDAQ: XLRN) Acceleron is a clinical stage biotechnology company targeting the body’s ability to regulate growth and to repair tissue. Research programs include treatments for myelodysplastic syndromes, kidney disease, and kidney cancer.
• 6. Here’s What You Need To Know •Kidney cancer data released February 28. •Dalantercept plus Inlyta: •Objective response rate of 25.0% (7/28). •Stable disease rate of 60.7% (17/28). •Median progression-free survival is 8.3 months. •Tracon Pharma also released data on February 28. •TRC105 plus Inlyta: •Objective response rate of 29% (5/17). •Stable disease rate of 59% (10/17). •Median progression-free survival is 8.4 months. Shares tumbled 18% in the past month.
• 7. Fool-worthy thoughts Both companies beat Inlyta monotherapy ORR of 11.3% and median PFS of 4.8 months; however, investors may want to wait for later stage data that could differentiate these two competitors.
• 8. 3. OvaScience Inc. (NASDAQ: OVAS) OvaScience is an emerging stage biotechnology company developing solutions designed to improve in vitro fertilization success rates.
• 9. Here’s What You Need To Know •Data for Augment in- vitro solution presented March 26th. •Data broadly positive. •Up to 53% IVF success in tough to treat cases. •Sell-off on confusion over comparing data to: •All IVF patients vs. tough-to-treat. •Clinical pregnancy rate vs. chemical pregnancy success rates. Shares tumbled 25.8% in the past month.
• 10. Fool-worthy thoughts Augment stacks up well in tough- to-treat cases, suggesting this could be an opportunity for long-term risk-tolerant investors to buy.
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