Biotech Growth Stocks Set to Benefit from Rising Volatility (REGN, OTLC, AMGN, ILMN, LLY, GILD, MRK)

With the spotlight firmly on Covid variants, it’s easy to lose sight of what will probably be the most important segment of the biopharma space over the next ten years: oncology. This is where the biggest success stories will be found. It’s where the largest revolutions will happen. It’s the epicenter of the most important advances we will make in healthcare over coming years.

However, because so much attention is currently being paid to Covid plays, interesting developments in the oncology space are happening with relatively little fanfare, presenting some interesting opportunities for investors.

At the same time, the pick-up in volatility across the market stands to drive capital away from cyclical names and companies highly correlated with the major indices, including big-cap tech names. Cancer drugs represent a long-term growth theme with no cyclical correlation, no ties to supply chain issues, no risk associated with Covid variants, and a ton of potential value in play that has been out of favor over recent months.

With that in mind, we take a look below at some of the most interesting stories among oncology biopharma stocks.

Regeneron Pharmaceuticals Inc. (Nasdaq:REGN) is a biotechnology company, which engages in the discovery, invention, development, manufacture, and commercialization of medicines. The company’s product portfolio includes the following brands: EYLEA, Dupixent, Praluent, Kevzara, Libtayo, ARCALYST, and ZALTRAP.

The firm accelerates the traditional drug development process through its proprietary VelociSuite technologies such as VelocImmune, which uses unique genetically humanized mice to produce optimized fully-human antibodies and bispecific antibodies.

Regeneron Pharmaceuticals Inc. (Nasdaq:REGN) recently announced that new and updated data from its diverse hematology program in blood cancers and disorders will be presented at the 2021 American Society of Hematology (ASH) Annual Meeting from December 11-14 in Atlanta, GA.

“Our hematology portfolio continues to expand with multiple trials now underway to investigate our bispecific antibodies, RNA-based therapies and gene editing, among other approaches,” said L. Andres Sirulnik, M.D., Ph.D., Senior Vice President, Translational and Clinical Sciences, Hematology at Regeneron. “Our diverse pipeline includes investigational medicines across several blood cancers including multiple myeloma and lymphoma, in addition to blood disorders such as paroxysmal nocturnal hemoglobinuria, aplastic anemia, amyloidosis and thrombosis. We continue to make progress across our hematology portfolio with eight assets currently in the clinic.”

Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week. REGN shares have been relatively flat over the past month of action, with very little net movement during that period. 

Regeneron Pharmaceuticals Inc. (Nasdaq:REGN) pulled in $3.5B during the company’s most recently reported quarterly financial data, powering dramatic growth topping 50%. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($5.8B against $3.7B).

Oncotelic Therapeutics Inc (OTC US:OTLC) is a small-cap player that looks like it’s starting to really break onto the scene in both the oncology and virology markets. The company has developed a first-in-class anti-TGF-β RNA therapeutic, OT-101, that has exhibited single agent activity in relapsed/refractory cancer patients. OT-101 also has shown activity against SARS-CoV-2 and has completed a phase 2 trial against COVID-19, with data analysis in progress. As a Covid asset, it should function agnostic of variants, which is obviously becoming an increasingly important factor.

However, as an oncology treatment, OT-101 is advancing along several paths right now. And the latest one pits it alongside KEYTRUDA, which is one of the most important cancer drugs to emerge over the past two decades.

Oncotelic Therapeutics Inc (OTC US:OTLC) announced this week that it has submitted clinical study protocol information to the US FDA for the initiation of a Phase 2 Trial (designated “M201”) for OT-101 in combination with Keytruda, a leading anti-PD-1 drug, as a treatment for patients with Malignant Pleural Mesothelioma (MPM).

This is part of a larger OT-101 oncology program designed to assess the impact of the treatment across multiple cancer indications where local tumoral secretion of TGF-β suppressed the clinical activity of checkpoint inhibitors, CAR-T, and vaccine. The OT-101-ONC program has been moving forward steadily through strategic alliance with top pharmaceutical companies. Of note is the biomarker program spanning mesothelioma, glioblastoma, lung and colorectal cancers, where AI driven transcriptome analyses will be used to derive the predictive biomarker for TGF-β therapeutics such as OT-101.

“This is the first of a series of planned clinical trials in patients with various solid tumors evaluating clinical benefit while also assessing a host of parameters associated with changes in the tumor microenvironment, including but not limited to T-cell infiltration, expression of various cytokines, and phenotypic and functionality changes pre-therapy versus post-therapy.” noted Dr. Anthony Maida, Chief Clinical Office – Translational Medicine.

Oncotelic Therapeutics Inc (OTC US:OTLC) CEO Dr. Vuong Trieu stated, “The groundwork laid down by OT-101/IL-2 and OT-101/PD-1 will serve as the foundation for future strategic alliances for OT-101/CAR-T and OT-101/Vaccines. CAR T-cell therapy, in which a patient’s immune T cells are modified so they will bind to cancer cells and kill them, has been shown to benefitted greatly from TGF-β inhibition in early clinical testing.”

Amgen Inc. (Nasdaq:AMGN) engages in the discovery, development, manufacture and marketing of human therapeutics. 

The company’s products include the following brands: Aranesp, Aimovig, KANJINTI, EVENITY, AMGEVITA, AVSOLA, BLINCYTO, MVASI, Corlanor, Enbrel, EPOGEN, IMLYGIC, Kyprolis, Neulasta, NEUPOGEN, Nplate, Parsabiv, Prolia, Repatha, Sensipar, Vectibix, Otezla, RIABNI, and XGEVA.

Amgen Inc. (Nasdaq:AMGN) recently announced the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion recommending conditional marketing authorization of LUMYKRAS® (sotorasib), known as LUMAKRAS® in the U.S., for the treatment of adults with advanced non-small-cell lung cancer (NSCLC) with KRAS G12C mutation and who have progressed after at least one prior line of systemic therapy. If the European Commission follows the recommendation for approval, LUMYKRAS will be the first targeted therapy available in the European Union (EU) for the KRAS G12C mutation, one of the most prevalent biomarkers in NSCLC.

“After 40 years of cancer research to target the KRAS mutation, many in the scientific community believed that KRAS was ‘undruggable’ leaving patients with this mutation with limited treatment options,” said David M. Reese, M.D., executive vice president of Research and Development at Amgen. “The LUMYKRAS development program was designed to bring this targeted therapy to patients with KRAS G12C-mutated non-small cell lung cancer as quickly as possible. The EMA CHMP positive opinion brings patients in the EU closer to this transformative therapy and highlights our commitment to improving patient outcomes in difficult-to-treat cancers.”

Even in light of this news, AMGN hasn’t really done much of anything over the past week, with shares logging no net movement over that period. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -5%. 

Amgen Inc. (Nasdaq:AMGN) managed to rope in revenues totaling $6.7B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 5.2%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($12.9B against $14.8B, respectively).

Other key stocks in the oncology biopharma space include Illumina Inc. (Nasdaq:ILMN), Eli Lilly & Co. (NYSE:LLY), Gilead Sciences Inc. (Nasdaq:GILD), and Merck & Co. Inc. (NYSE:MRK).

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