Top Biotech Opportunities for the End-of-Year Run (CRSP, ATRX, PTPI, ALNA, MRNA, VRTX, IBB)

The Biotech space made a big move on Wednesday, sparking a rebirth in excitement about the space following the Federal Reserve’s move to start tapering its bond purchases. The move was expected to be a big hurdle for tech stocks, including biotechs. Instead, we got a melt-up, which included a breakout to new multi-month highs for the broad biotech space.

That could indicate institutional investors moving back into the space in a post-taper world, which would suggest outperformance to come.

Outside of index-level events, the Biotech space offers investors really the only true diversification option among major equity sectors given the space’s non-cyclicality and its lack of vulnerability to changes in other asset classes such as currency effects or interest rate moves.

With that in mind, we take a look at some of the most compelling stories in the biotech space, including a drill-down into recent catalysts.

CRISPR Therapeutics AG (Nasdaq:CRSP) engages in the development and commercialization of therapies derived from genome-editing technology.

The company’s proprietary platform CRISPR/Cas9-based therapeutics allows for precise and directed changes to genomic DNA.

CRISPR Therapeutics AG (Nasdaq:CRSP) just reported financial results for the third quarter ended September 30, 2021. The announcement was taken positively by the market off the bat.

“The third quarter marked significant progress across our portfolio,” said Samarth Kulkarni, Ph.D., Chief Executive Officer of CRISPR Therapeutics. “With our partner Vertex, we achieved target enrollment for the CTX001 clinical trials in patients with beta thalassemia and sickle cell disease, which can support regulatory submissions in late 2022. Additionally, we demonstrated proof of concept for our allogeneic CAR-T platform with positive data from our CARBON trial of CTX110, which showed that immediately available “off-the-shelf” cell therapies can offer efficacy similar to autologous CAR-T with a differentiated safety profile for patients with large B-cell lymphomas. Based on these encouraging results, we plan to expand the CARBON trial into a potentially registrational trial in the first quarter of 2022. Furthermore, we hope to bring these transformative allogeneic CAR-T therapies to patients in outpatient and community oncology settings, enabling broad access.”

If you’re long this stock, then you’re liking how the stock has responded to the announcement. CRSP shares have been moving higher over the past week overall, pushing about 4% to the upside on above average trading volume.

CRISPR Therapeutics AG (Nasdaq:CRSP) managed to rope in revenues totaling $900.7M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a massive rate of top line growth of more than 2 million percent compared to year-ago data. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($2.6B against $99.9M).

Adhera Therapeutics Inc (OTC US:ATRX) is another name that ran big on Wednesday, with shares jumping over 10% after finding support at the stock’s key 50-day moving average earlier in the week. This is a particularly interesting name because the company has already licensed two promising compounds, MLR-1019 (armesocarb) and MLR-1023 (tolimidone), from Melior Pharmaceuticals for development, using its own expertise. 

Through these compounds, the company is now targeting the $6 billion underserved Parkinson’s market, the $100-plus billion diabetes market, and the $30-plus billion non-alcoholic steatohepatitis, or “NASH”, space. Together, that presents a lot of juice in terms of potential future value of the platform.

Adhera Therapeutics Inc (OTC US:ATRX), to build on this momentum, announced last month that it has extended its relationship with Melior through the addition of exclusive development rights for two more indications to the existing licensing agreement covering MLR-1023 (tolimidone), one of the world’s only potent and specific lyn kinase activators.

According to its release, Adhera has now been granted exclusive rights to advance development of MLR-1023 for NASH as well as pulmonary inflammation. The company noted that it intends to explore abbreviated clinical trial opportunities for these indications based upon completed clinical trials including more than 700 patients treated with MLR-1023 defining strong safety and tolerability profiles.

That suggests it is already potentially further along in the NASH race than many competitors without the market having had any means to discount that progress through upside share repricing. MLR-1023 has reportedly produced compelling data to date, including improvement in NAFLD (Non-alcoholic fatty liver disease) Activity Score, or NAS, decreased liver weight, reduction in steatosis, improved insulin sensitivity, anti-fibrotic activity, and reduction in adiposity. Other research on MLR-1023 by independent investigators has revealed modulation of lipid pathways to reduce fat accumulation in the liver and improved cell survival and hepatocellular regeneration, lending further evidence that clinical studies are warranted for the indication.

Adhera Therapeutics Inc (OTCMKTS:ATRX) CEO, Andrew Kucharchuk, stated in the release, “MLR-1023 is a remarkable compound that positions us to address some largely unattended, yet immense markets, including diabetes, NASH, and the swath of maladies where pulmonary edema is a problem, starting with infections with the potential to explore cardiovascular diseases in the future. We are thrilled to have a partner in Dr. Andrew Reaume and his team at the Melior family of companies and look forward to shepherding all their exciting work to the next stage of development.”

Petros Pharmaceuticals Inc. (Nasdaq:PTPI) is involved in sales, marketing, regulatory and medical affairs, finance, trade relations, pharmacovigilance, market access relations, manufacturing, and distribution. It operates through the Prescription Medications and Medical Devices segments.

The Prescription Medications segment handles Stendra, an FDA approved PDE-5 inhibitor prescription medication for the treatment of erectile dysfunction, and H100, a topical formulation candidate for the treatment of acute Peyronie’s disease. The Medical Devices segment consists of vacuum erection devices.

Petros Pharmaceuticals Inc. (Nasdaq:PTPI) recently announced a 476% growth year-over-year of STENDRA tablet sales as part of an exclusive digital health marketing agreement with Hims & Hers Health, Inc. (“Hims & Hers” or “Hims”), the multi-specialty telehealth platform focused on providing modern personalized health and wellness experiences to consumers. The companies also announce the availability of additional dosages of STENDRA through the Hims & Hers platform, further expanding the partnership.

“Our continued relationship with Hims supports an industry-leading telehealth platform that allows individuals to inquire about and address erectile dysfunction with discretion and by way of a convenient method of healthcare engagement,” said Fady Boctor, Petros Pharmaceuticals’ President and Chief Commercial Officer. “With significant growth year-over-year of STENDRA tablet sales through Hims, we are excited to expand our collaboration with Hims and enhance access to STENDRA through this critical channel.”

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 64% in that timeframe.

Petros Pharmaceuticals Inc. (Nasdaq:PTPI) pulled in revenues totaling $2.5M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 37.2%, 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 ($11M against $34.5M, respectively).

Other key players in the biotech space include Allena Pharmaceuticals Inc. (Nasdaq:ALNA), Moderna Inc. (Nasdaq:MRNA), Vertex Pharmaceuticals Inc. (Nasdaq:VRTX), and iShares Biotechnology ETF (Nasdaq:IBB).

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Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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