Mark Prvulovic


Out of all the coronavirus vaccine makers on the market, why did Dr. Anthony Fauci call out Moderna?

There are well over 100 separate COVID-19 vaccines in development at the moment. While many of the largest names in the healthcare industry have jumped at this opportunity to develop a vaccine, smaller, less-well-known companies are actually leading the way in this area.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIAID), has singled out Moderna (NASDAQ:MRNA) and its COVID-19 vaccine candidate as being especially promising. What makes Moderna’s COVID-19 vaccine so special, and is the company worth a spot in your investment portfolio?


What did Fauci say?

While still somewhat cautious, Fauci went on to say that Moderna’s vaccine results have surpassed his expectations. In a statement on May 22, Fauci said: “The vaccine induced what we call neutralizing antibodies, as opposed to just binding antibodies, and neutralizing antibodies are antibodies that actually can block the virus. Having looked at the data myself, it is really quite promising.” He added that the results ended up being “even better than we thought” even at the more moderate doses seen in the clinical trial in question.

Moderna’s candidate, mRNA-1273, first began phase 1 trials with NIAID back in March. It was also one of the very first vaccine candidates to begin clinical testing, which it did alongside another small-cap vaccine developer, Inovio Pharmaceuticals.

While the complete trial data set hasn’t been released yet, what we know so far about the results seems very positive. For one, there were no severe adverse reactions at all, with the only incident being a rash on the injection site of one patient. The vaccine proved effective in triggering sufficient antibody response in patients as well, which helps prevent the virus from spreading throughout the body.

What makes this vaccine so special?

Moderna’s COVID-19 vaccine uses a new type of technology not seen before in the world of vaccinations. Whereas most vaccines are DNA based, mRNA-1273 targets the mRNA (or messenger RNA) of the cell instead.

mRNA is like the cell’s courier service, copying information from the nucleus (where the DNA is stored) and then transporting it to the rest of the cell. That means that mRNA is much easier to access given its presence all across the cell, whereas DNA-based vaccines need to get to the nucleus to access the cell’s DNA.

As such, vaccines built on mRNA-based technology could end up becoming more effective than their DNA-based cousins due to the ease of accessing mRNA. At the moment, Moderna is one of the only companies on the market that is exclusively focused on mRNA technologies, and it is considered a leading company in this space.


The rest of Moderna’s pipeline

While the excitement surrounding its COVID-19 vaccine is what has propelled this meteoric rise, the company still has plenty of other things going for it. Its drug pipeline includes 23 candidates in total (including mRNA-1273) across a variety of medical conditions. This includes a number of cancer vaccines, as well as some prophylactic (preventative) treatments for viral infections like the cytomegalovirus and the Zika virus.

All of its candidates are still in the earlier stages of clinical development, with only three candidates having entered phase 2 trials as of right now. This includes Moderna’s cytomegalovirus vaccine (mRNA-1647), a personalized cancer vaccine (mRNA-4157), and a myocardial ischemia treatment (VEGF-A) for a condition in which a blocked artery prevents blood flow to the heart muscle.

Is Moderna worth a spot in your portfolio?

Around a year ago, Moderna was a mid-cap stock with a market cap of around $5 billion. Over the past few months, however, share prices have multiplied, and Moderna’s market cap now sits at around $27 billion.

While the laws of probability state that most early-stage candidates end up failing to pass clinical trials, Moderna only needs to hit one or two home runs to become a major success. Although there’s plenty of competition in the COVID-19 vaccine space right now, Moderna’s mRNA-1273 is among the leading candidates so far in clinical development.

One downside to Moderna is that it’s still not making a profit. First-quarter results saw a $124.2 million net loss, with revenue of just $8.4 million. However, that’s par for the course when it comes to clinical-stage biotech stocks. As long as Moderna has enough cash to finance its operations (with more than $1.7 billion in cash, it does), investors shouldn’t worry too much about revenues or losses at this stage.

Nothing’s ever certain in the world of biotech, and candidates that seemed promising in early clinical testing often fail to pass the more stringent late-stage trials. However, with its 23 candidates in development, Moderna has a pretty good chance of finding success somewhere. If you’re looking for a high-growth, high-risk stock that’s also making waves in the coronavirus world, I think that Moderna is a good company to invest in right now.

Author: Mark Prvulovic

Source: Fool: Fauci Just Singled Out This Biotech Stock. Is It a Buy?

CRISPR Therapeutics (NASDAQ:CRSP) made news recently after unveiling some impressive results for its signature gene-editing drug, CTX001. Coupled with an earlier analyst upgrade from Oppenheimer, the news caused shares of CRISPR to surge by more than 25% on Nov. 19. Since then, however, CRISPR’s stock has given back most of those gains.

Is this recent dip a good buying opportunity for investors? Let’s go over some of the details surrounding CRISPR Therapeutics’ recent results, how it compares to its competitors, and whether now’s a good time to add this company to your portfolio.

A brief look at the results

CRISPR’s first clinical update for its signature drug candidate, CTX001, was considered a definite success. The announcement included results from the first two patients who were treated with the gene-editing drug, with one patient having sickle cell disease and the other diagnosed with infusion-dependent beta thalassemia. Both patients reported that after being enrolled in the study for a length of time, key symptoms disappeared entirely.

For the patient with sickle cell disease, the main symptom being evaluated was the number of blockages that occurred due to the sickle-shaped nature of the blood cells. Whereas previously the patient had on average seven of these blockages (also known as vaso-occlusive crises) per year, during the nine-month treatment period, the patient had a complete absence of any blockages whatsoever.

A similar result was found in the patient with beta thalassemia, who required on average 16.5 blood transfusions each year historically. After two years of taking CTX001, however, this figure dropped down to zero, with the patient requiring no blood transfusions at all. While there are plenty more details that could be discussed, the key takeaway is that the early results have been excellent.

Potential competitors

While CTX001 has shown promising results thus far, it’s not that far ahead of other competitor drugs being developed. Blood disorders, in particular, are a popular condition for gene-editing companies to tackle, with Editas Medicine (NASDAQ:EDIT) and Sangamo Therapeutics (NASDAQ:SGMO) both developing their own sickle cell disease and beta thalassemia treatments.

Editas’ own sickle cell drug, EDIT-301, showed some promising preclinical results earlier this year at the European Hematology Association and is expected to provide a further update by the end of the year. However, unlike CRISPR, Editas’ flagship drug doesn’t target blood disorders but instead tackles a rare form of blindness in children, Leber congenital amaurosis. EDIT-101 targets babies with protein deficiencies in their retinas, preventing what would become an inevitable case of blindness.

As for Sangamo, the company has a fairly broad pipeline, with separate drugs for beta thalassemia and sickle cell disease, ST-400 and BIVV-003, in development. However, both of these drugs are still at a very early stage of clinical testing; one study enrolled two patients to be treated with ST-400 for beta-thalassemia. Early data is expected to come in before the end of the year, something that biotech investors should keep an eye out for.

Similarly to Editas, however, Sangamo’s beta thalassemia and sickle cell treatments aren’t its main drug candidates. Instead, the company’s flagship treatment is SB-525, which targets patients with hemophilia A, a rare bleeding disease that’s caused by a lack of blood plasma required to produce a crucial protein known as clotting factor VIII.

Is CRISPR the best gene-editing stock right now?

Whether CRISPR is the absolute best gene-editing stock at the moment is questionable. CRISPR does seem to be a front-runner in the sickle cell and beta thalassemia markets at the moment, which are estimated to become worth $3.5 billion and $5.5 billion, respectively, in the next few years. However, other gene-editing companies have an edge in treating other conditions where CRISPR doesn’t have an edge. Sangamo’s hemophilia treatment is a perfect example: This is an area that is expected to turn into a $14.8 billion market by 2025.

At the same time, some pharmaceutical companies that are venturing into the gene-editing world are moving away from using the popular CRISPR/Cas9 gene-editing tool developed by CRISPR Therapeutics. Novo Nordisk announced recently that instead of using CRISPR/Cas9 technology, it would opt for another mRNA-based technology developed by bluebird bio referred to as megaTALs. There’s some research that indicates that this newer mechanism of gene editing is more precise than the older CRISPR/Cas9 system.

Although it’s hard to say which gene-editing stock is the single best investment to choose from at the moment, there’s definitely a strong case to be made for CRISPR Therapeutics, if only on its sickle cell/beta thalassemia results. However, I’d argue that investors would do better by taking a shotgun approach and holding a small basket of the top gene-editing stocks, including CRISPR, Editas, and Sangamo, among others.

Author: Mark Prvulovic

Source: Fool: Is CRISPR Therapeutics the Best Gene-Editing Stock Right Now?

Investors interested in the exciting world of healthcare have plenty of options to chose from. Whether it be one of the many high-growth, small-cap healthcare companies offering cutting-edge treatments or a more established, large-cap giant, the sector is expected to continue to do well as healthcare costs in countries like the U.S. keep rising.

However, some healthcare stocks are particularly strong investments now. Novartis (NYSE:NVS), AstraZeneca (NYSE:AZN), and Portola Pharmaceuticals (NASDAQ:PTLA) all have highly promising drug candidates on the horizon that could, or already have, become blockbuster treatments.

1. Novartis

Healthcare-giant Novartis has done well for itself over the past year, and when taking a look at its drug lineup, it’s not surprising. The majority of its top 10 revenue-producing drugs have seen considerable increases over the past quarter. Sales of Cosentyx, Novartis’ top-selling drug with $937 million in quarterly revenue, have gone up by 27%. Its third top-selling drug, Lucentis, has seen revenues increase by 5% to $500 million while sales of Entresto have shot up by a whopping 61% over the past quarter, now accounting for $430 million in revenue.

At the same time, there were a number of noteworthy announcements over the past couple of months that should intrigue investors. For one, Novartis revealed impressive phase 3 clinical trial results for its breast cancer drug Kisqali. When taken alongside another endocrine drug, fulvestrant, survival rates for breast cancer patients shot up to 58% in comparison with the normal 46% seen in patients taking fulvestrant by itself. Breast cancer is already a major market, estimated to reach $38.4 billion by 2025, and Kisqali could become a major treatment in the future should it continue to do well.

Novartis was hit with a recent piece of bad news when the U.S. Food and Drug Administration put a hold on its expensive gene-therapy drug candidate, Zolgensma. Regulators found that a high-dose animal test group showed increased inflammation in the spinal nerve cells, a safety concern that has now put the drug in stasis until Novartis responds. Investors might also recall that Zolgensma was the subject of an earlier data manipulation scandal, where scientists from Novartis’ subsidiary AveXis, which was responsible for the drug’s development, created misleading data prior to the drug’s FDA approval.

However, even if Zolgensma ends up getting sidelined for a while, Novartis’ other mainline drugs are seeing significant increases in revenue, and its other drug candidates show plenty of promise.

2. Portola Pharmaceuticals

The smallest company on this list, Portola Pharmaceuticals is a relatively unheard-of mid-cap healthcare stock that’s getting a fair bit of attention. Growth investors have been sizing up the company’s new anticoagulant drug, Andexxa, which is the only therapy in the world that can treat the excessive bleeding that can sometimes be a side effect from the current generation of blood thinners.

While investors not familiar with the subject might think this is an extremely niche market, the reality is that there is an ever-increasing number of hospital visits due to excessive, anticoagulant-induced bleeding. In 2017, there were over 140,000 hospital admissions in the U.S. alone, with the average cost of treating a patient with anticoagulant-induced bleeding coming in at around $100,000.

Due to the lack of convenient treatment options in the market right now as well as the severity of this issue, the FDA quickly awarded Andexxa both a U.S. Orphan Drug as well as a Breakthrough Therapy designation. While it’s difficult to gauge the exact market size, Portola’s initial $27,500 price point for the drug could lead to a market size somewhere between $3 billion or $4 billion annually, considering the number of hospital admissions.

It’s worth noting that other healthcare giants are eager to see Andexxa succeed as well. Johnson & Johnson and Pfizer, both leaders in the anticoagulant space, know that excessive bleeding is a significant complication that might deter some patients from taking their anticoagulants. As such, Andexxa’s arrival in the marketplace can help alleviate these fears and encourage further use. Back in 2016, Pfizer provided part of a $50 million loan to Portola to help cover costs to prepare Andexxa for FDA approval. Keeping this in mind, it wouldn’t be surprising to see these healthcare giants provide Portola some more financial backing in the future in the unlikely instance it needs further support.

3. AstraZeneca

Another high performing large-cap healthcare stock in 2019 is AstraZeneca. Over the past few years, shares of the company have seen significant growth, making the healthcare giant one of the best performing large-cap stocks in the entire sector.

AstraZeneca already has several drugs that are on the cusp of garnering blockbuster status. In short, the company’s oncology drugs have been the top-performing area for the company, with overall sales growth increasing by 50% over the past year. Tagrisso has reached $2.3 billion in sales, an 82% increase in comparison to the same time last year. Imfinzi has grown by 182% to $1.05 billion in sales, while Lynparza has grown to $847 million, a 93% increase.

While growth in other areas, such as its respiratory portfolio, came in at a slower 9%, it’s worth noting that performance in countries deemed to be ’emerging markets’ (which includes China, Russia, and Brazil among other countries) have been exceptional. Considered to be the company’s largest region in terms of sales, amounting to 35% of all revenues, overall sales in these countries have increased by 19% over the past year.

With so many parts in motion, it’s hard to predict exactly how much AstraZeneca will grow over the coming years, but what does seem to be certain is that the company still has plenty of room to rise. The past couple of months have seen a number of major clinical trial announcements which could result in further regulatory approvals for many of AstraZeneca’s therapies. This includes Lynparza’s success in treating metastatic castration-resistant prostate cancer as well as Imfinzi’s success in delaying the progression of previously untreated metastic non-small cell lung cancer.

The only real issue that some investors might have is that the company is trading at quite a hefty valuation. Compared to Novartis, which has a 17.3 price-to-earnings ratio (P/E), AstraZeneca trades at a hefty 60.9 P/E. While in a perfect world investors might want to wait for prices to fall a little, getting a perfect entry point might be an unreasonable expectation. There are good reasons why AstraZeneca is trading at such as premium, and this is one case where it’s justified to pay a little bit extra in terms of valuation metrics for a company this strong.

As for Novartis and Portola, both companies are good investments considering the strength of their drug portfolios. As mentioned above, Novartis trades at a cheaper valuation than the pricier AstraZeneca, and with the Novartis continuing to see impressive clinical trial results for the most part, its treatments are expected to continue growing in scope and revenue. In regards to the much smaller Portola, the likely prospect of this $2 billion market cap biotech adding between $3 billion and $4 billion in annual revenue in the next 12 to 24 months is enough to make it a highly compelling buy at present.

Author: Mark Prvulovic

Source: Fool: 3 Top Healthcare Stocks to Buy Now

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