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Shares of Startup Biotechs Soar on Cancer Study Results

Stock up more than 560% in past month

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Barry Cohen
Dec 28, 2020
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Breast cancer is the second leading cause of death of women in the U.S. alone. Given the prevalence of the disease, it's no surprise that numerous pharmaceutical and biotech companies are searching for effective treatments. Those firms that are successful will not only be recognized for their humanitarian efforts but stand to reap substantial financial rewards.

The Global Breast Cancer Drugs Market is expected to grow at a compound rate of nearly 9% in the next four years, reaching more than $25.4 billion by the end of 2025, according to an analysis by Report Linker. Given the commercial opportunity, many of the familiar industry names have breast cancer programs, including Pfizer Inc. (PFE), Bristol-Myers Squibb Co. (BMY), Sanofi (SNY), Eli Lilly and Co. (LLY), GlaxoSmithKline (GSK) and Gilead Sciences Inc. (GILD), among others.

There are also several relative unknowns with ambitious breast cancer treatments in development. A few have captured investors' attention based on data presented at the recent San Antonio Breast Cancer Symposium, which was held virtually this year.

Greenwich Life Sciences

Making the biggest splash was Greenwich Life Sciences Inc. (GLSI). At one point on Dec. 9, the 15-year-old Houston-area company's shares had skyrocketed nearly 3,000%, setting off at least 24 halts due to volatility, a key reason being that the firm's float is less than 10% of its shares.

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Now, I know what you want to ask, but unfortunately the answer is no, Greenwich didn't cure cancer, Covid-19 and world hunger all at the same time. What lit the fuse on the stock was a poster presentation showing the company's GP2 immunotherapy showed zero recurrences of breast cancer in patients who had previously undergone surgery.

About half of all women with recurring breast cancer do not respond to the two available treatments, resulting in metastatic breast cancer and a poor prognosis, according to company CEO Snehal S. Patel, who owns more than 60% of Greenwich's shares. "Approximately 80-85% of metastatic breast cancer patients do not survive. By addressing this unmet need, GP2 may reach a potential market exceeding $5 billion," said Patel in a statement.

The company's next step is to enter a phase 3 trial to treat a similar population of moderate to severe breast cancer patients.

In the three weeks after the poster announcement, the frenzy over Greenwich's stock has cooled substantially. Shares are trading at about $20 below the December close of $56. Still, that's about seven times higher than where the stock started the month.

Immutep Limited

Cancer-biotech Immutep Limited (IMMP) got a much more pedestrian boost to its share price after reporting promising study results for its lead drug candidate, eftilagimod alpha, for patients with late-stage breast cancer. Immutep said its treatment appeared to extend patients' lifespan by 2.7 months when taken in combination with chemotherapy, compared to patients treated with chemotherapy alone.

The company's shares rose about 75% to $3.45 on the news, but have since eased to just under $3.

Immutep chief medical officer Dr. Frederic Triebel said the study result supports the company's belief that efti can be an effective activator of the body's immune system in fighting late-stage cancer, reported the Australian website Stockhead.

Immutep said it is still analyzing the study data and is expected to report on overall survival in mid-2021.

SELLAS Life Sciences

SELLAS Life Sciences Group, Inc. (SLS) is a New York City-based biopharma company that is developing several novel therapies to treat several types of cancer, including breast cancer. The stock seemed to ride the wave of investor enthusiasm for Greenwich along with positive study results of one of its treatments, climbing to $7.26 on Dec. 9, well above its 52-week low of $1.46. It has since eased to just short of $6.

SELLAS recently announced it had signed a license agreement that grants China's 3DMed the rights to develop and commercialize SELLAS' lead late-stage drug candidate, according to a company press release. Potential payments to SELLAS could total more than $200 million in license fees and milestone payments, not including future royalties.

Disclosure: The author has positions in Pfizer, Bristol-Myers, Sanofi, Lilly, and Gilead Sciences

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