We are currently living through several simultaneous technology revolutions all of which are set to change everything about how we live our lives.
The most important of them are encompassed by artificial intelligence, quantum computing, and advanced biotechnology, which now includes ideas like mental health and genomics, and may remain increasingly in focus in the aftermath of the pandemic.
It should also be obvious that these revolutions reinforce each other. For example, our ability to identify and cure diseases will be augmented by artificial intelligence platforms running at hyper-speed on quantum computation systems.
The biotech space, in particular, has an important advantage over other non-cyclical technology growth themes: it has a very low correlation with the broad market. That allows investors to speculate without worrying about major macro risks like inflation, recessions, monetary policy hikes, new lockdowns, geopolitical disruptions, or other unknown market hurdles.
With that in mind, we focus here on some of the more interesting biotech opportunities on the menu right now for investors.
Novavax Inc. (Nasdaq:NVAX) focuses on the discovery, development and commercialization of vaccines to prevent infectious diseases. It provides vaccines for COVID-19, seasonal flu, respiratory syncytial virus, Ebola, and Middle East respiratory syndrome.
The stock has repeatedly been in the news as “the next big vaccine story in the market”. In fact, many analysts believe NVAX’s vaccine solution could be superior to those on the market now because it is simpler – not involving mRNA – and very effective as well as being easy to store and transport.
Novavax Inc. (Nasdaq:NVAX) added to that story by recently announcing the completion of its rolling regulatory submission to the U.K. Medicines and Healthcare products Regulatory Agency (MHRA) for authorization of its COVID-19 vaccine candidate. The company’s application for Conditional Marketing Authorization (CMA) marks the first submission for authorization of a protein-based COVID-19 vaccine in the United Kingdom.
“This submission brings Novavax significantly closer to delivering millions of doses of the first protein-based COVID-19 vaccine, built on a proven, well-understood vaccine platform that demonstrated high efficacy against multiple strains of the coronavirus,” said Stanley C. Erck, President and Chief Executive Officer, Novavax. “We look forward to MHRA’s review and will be prepared to deliver vaccine doses following what we anticipate will be a positive decision. We thank the clinical trial participants and trial sites in the United Kingdom, as well as the U.K. Vaccines Taskforce, for their support and vital contributions to this program.”
If you’re long this stock, then you’re liking how the stock has responded to the announcement. NVAX shares have been moving higher over the past week overall, pushing about 3% to the upside on above average trading volume. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -30%.
Novavax Inc. (Nasdaq:NVAX) managed to rope in revenues totaling $298M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 738.6%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($2.1B against $1.7B).
Adhera Therapeutics Inc (OTC US:ATRX) is a particularly interesting name in the biotech space because it seems to be flying under the radar despite its strong IP foundation and the enormous size of the markets its pipeline is targeting.
First of all, ATRX has 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.
Adhera Therapeutics Inc (OTC US:ATRX), on this last point, recently announced 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.”
Illumina Inc. (Nasdaq:ILMN) engages in the development, manufacturing, and marketing of life science tools and integrated systems for large-scale analysis of genetic variation and function. It operates through Core Illumina segment, which serves customers in the research, clinical and applied markets, and enable the adoption of a variety of genomic solutions.
The firm’s products include instruments, kits and reagents, selection tools, and software and analysis. Its services include sequencing and microarray services; proactive instrument monitoring; and instrument services, training, and consulting.
Illumina Inc. (Nasdaq:ILMN) recently announced an agreement with Israel’s Ministry of Health (MoH) for a pilot program to implement the use of whole-genome sequencing (WGS) in critically-ill infants suspected of having a genetic disorder in neonatal intensive care units (NICU). The program, led by the Genetics Institute (Tel-Aviv Sourasky Medical Center), will evaluate the use of WGS in routine care as an effective first-tier diagnostic tool to enable faster identification of disease-causing genetic abnormalities in infants, aiding their clinical care and management.
“Evidence from other countries shows that whole-genome sequencing offers significant benefits for the diagnosis of suspected genetic disease in critically-ill infants. Based on this international experience, our aim is to implement and provide this approach as a diagnostic assay in all neonatal intensive care wards, ideally replacing the routine diagnostic tests currently used,” said Dr. Amihood Singer, Head of Community Genetics Department at the Ministry of Health, Israel.
Even in light of this news, ILMN hasn’t really done much of anything over the past week, with shares logging no net movement over that period. ILMN shares have been relatively flat over the past month of action, with very little net movement during that period.
Illumina Inc. (Nasdaq:ILMN) managed to rope in revenues totaling $1.1B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 77.9%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($4.3B against $874M).
Other compelling names in the biotech space include Ocugen Inc. (Nasdaq:OCGN), Vertex Pharmaceuticals Inc. (Nasdaq:VRTX), and COMPASS Pathways PLC ADR (Nasdaq:CMPS).
