4 Promising Biotech Stocks With Upcoming Catalysts
The biotechnology industry is one of the most event-driven industries around, and so it is extremely important for investors to monitor its calendar for specific events and analyze their potential impact on the share price. The next few months should be extremely active for many biotechnology stocks and the following stocks should see a lot of investor interest and, potentially, a large share-price appreciation.
GlaxoSmithKline (NYSE:GSK) is one such stock that investors should be paying attention to. The company has had a stellar run over the past 6 months, appreciating by more than 15 percent. A lot of this growth was driven by strong financial reports, especially for the second quarter. Sales for the quarter were approximately $10.2 billion, an increase of 2 percent from the same quarter a year ago. The company maintained its guidance going forward. For 2013, management expects to generate sales growth of about 1 percent and EPS growth of between 3 percent and 4 percent. Because of the strong quarter and future growth expectations, the company’s dividend was raised by 6 percent. In addition to these solid results, the company anticipates announcing data from its Phase III trial of drisapersen during the fourth quarter.
This experimental drug is used to treat Duchenne Muscular Dystrophy, which is a rare, progressive, muscle-wasting disease that forces patients into wheelchairs during their childhood years. Unfortunately, the disease ultimately results in death. Drisapersen works by a mechanism known as exon skipping. It is designed to allow production of the needed dystrophin protein in the muscles of boys with DMD caused by specific mutations.
Earlier this year, drisapersen received the highly coveted FDA “Breakthrough Therapy” designation, which provides the company with more FDA guidance regarding the regulatory process and a much faster review of its drug application. As mentioned earlier, investors can expect Phase III data at some point during the fourth quarter the year. Currently, GlaxoSmithKline is ahead of its main competition Sarepta Therapeutics (NASDAQ:SRPT), which has only completed a Phase II trial. However, last month, the company announced that it would file a New Drug Application with the FDA for Eteplirsen. Despite this announcement, given that the FDA didn’t grant the company’s preferred request of accelerated approval, it appears likely that Sarepta is headed for an inevitable Phase III trial.