Three Small-Cap Plays that Offer Some Bang for the Buck (CLVS, QBIO, BPMC)

Nicholas Maithya - January 7, 2019

The carnage in the biotech space in Q4 of last year was devastating to a lot of portfolios, and many of the stocks in the space became victims of aggressive tax-loss selling before year end to add insult to injury. But, rejoice, dear investor! That just means we have some great values lying around on the floor to pick up.

Any shopping list should be suited to an investors goals. For those looking for some big bang for their bucks, smaller and more speculative fast-movers can offer the most dramatic opportunities. Here, we will look at three interesting stocks that fit this description. And all three have been seeing a recent surge in new money and attention: Clovis Oncology Inc (NASDAQ:CLVS), Q BioMed Inc (OTCMKTS:QBIO), and Blueprint Medicines Corp (NASDAQ:BPMC).

Clovis Oncology Inc (NASDAQ:CLVS) bills itself as a biopharmaceutical company that focuses on acquiring, developing, and commercializing anti-cancer agents in the United States, Europe, and internationally.

This stock has been in the news lately as a potential pin-action play on takeovers in the oncology space.

Its commercial product includes Rubraca (rucaparib) tablet, a small molecule poly ADP-ribose polymerase inhibitor, used as monotherapy for the treatment of patients with deleterious BRCA mutation associated advanced ovarian cancer, who have been treated with two or more chemotherapies, and selected for therapy by an FDA-approved companion diagnostic for Rubraca.

The company’s product candidates include lucitanib, an oral inhibitor of the tyrosine kinase activity of vascular endothelial growth factor receptors, platelet-derived growth factor receptors alpha and beta, and fibroblast growth factor receptors; and rociletinib, an oral mutant-selective inhibitor of epidermal growth factor receptor.

It distributes its products primarily through specialty distributors and pharmacy providers to patients and health care providers. The company has license agreements with Pfizer Inc., AstraZeneca UK Limited, Advenchen Laboratories LLC, and Celgene Corporation; collaboration and license agreement with Les Laboratoires Servier; a clinical collaboration with Bristol-Myers Squibb Company; a partnership with Foundation Medicine, Inc; and a diagnostic collaboration with Myriad Genetics, Inc.

 

Q BioMed Inc. (OTCMKTS:QBIO) shares have been on fire in recent action. The shift in behavior looks to be about the January Effect for investors, with money managers no longer having to worry about stigma or tax loss advantages. Once we got to January 1, the only thing to worry about is where you can make the most money going forward. And the stocks that have taken off since that moment generally represent what smart money sees as real value.

 

That value now revolves around Autism and Non-Verbal Learning Disorder (NVLD).

 

The company has a new drug in the pipeline that attacks this underserved growth market. This is a rare instance where the technicals appear to be signaling an underappreciated growth opportunity, and it deserves some immediate attention.

 

QBIO is a biomedical acceleration and development company that focuses on licensing, acquiring, and providing resources to life sciences and healthcare companies.

 

The company offers Strontium Chloride SR89, a radiopharmaceutical agent for the treatment of pain associated with metastatic bone cancer. It is also developing Man-01, a pre-clinical lead candidate for the treatment of primary open angle glaucoma. Q BioMed Inc. has a partnership with Sphaera Pharma to develop an analog of QBM-001 for pediatric developmental nonverbal disorder; and a collaborative agreement with SRI International to provide formulation development, preclinical development, and early clinical manufacturing of QBM-001.

 

Q BioMed Inc (OTCMKTS:QBIO) had no reported sales in its last quarterly financial data. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($787K against $707K).

 

As noted above, the big picture right now for QBIO is a very indicative chart – the stock has been launching ever since we got past the perverse incentivization of the year-end antics, including tax loss selling. Ever since we got to 2019, money has been flowing into QBIO shares. We would suggest that it may be worth some further research given this show of interest.

 

 

Blueprint Medicines Corp (NASDAQ:BPMC) bills itself as a biopharmaceutical company that develops drugs of small molecule kinase inhibitors that target genomic drivers in various cancers and a rare genetic disease.

Like CLVS above, BPMC has started to catch a bid in response to the major offer on the table by Ely Lilly for Loxo Oncology. BPMC is seen as a similar market play to LOXO.

Its lead drug candidates include avapritinib, which is in Phase I clinical trials that targets KIT Exon 17 mutant proteins and PDGFRa D842V mutations, that are drivers of cancer and proliferative disorders, including gastrointestinal stromal tumors and systemic mastocytosis; and BLU-554, which is in Phase I clinical trials an orally available, potent, and irreversible inhibitor of the kinase FGFR4 that is activated in a defined subset of patients with hepatocellular carcinoma.

It is also developing BLU-667, a drug candidate that targets RET, a receptor tyrosine kinase that is abnormally activated by mutations or translocations; and RET resistant mutants that would arise from treatment with first generation therapies.

In addition, the company is developing BLU-782, a discovery program targeting the kinase ALK2 for the treatment of fibrodysplasia ossificans progressiva, a rare genetic disease caused by mutations in the ALK2 gene, ACVR1.

The company has an agreement with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. to discover, develop, and commercialize small molecule therapeutics targeting kinases. The company was formerly known as Hoyle Pharmaceuticals, Inc. and changed its name to Blueprint Medicines Corporation in June 2011. Blueprint Medicines Corporation was founded in 2008 and is headquartered in Cambridge, Massachusetts.

Blueprint Medicines Corp (NASDAQ:BPMC) pulled in sales of $1.1M in its last reported quarterly financials, representing top line growth contraction of -86.4%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($559.6M against $56.3M).

 

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Nicholas Maithya

Nicholas is a Financial Analyst by profession, who enjoys writing about investments, technological developments, business, economics and other financial topics at various financial publications. Join him here on Wallstreetpr.com as he endeavors to deliver to you the latest breaking news on the above mentioned fronts. Contact him by email at [email protected] or follow Nicholas Kitonyi @nmaithyak on Twitter.

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