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Intellia Shares Soar on Positive Test Results

Merck, Sanofi, Gilead and others stand to benefit from clinical trials

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Jun 28, 2021
Summary
  • Intellia shares climbed nearly 50% Monday after study of gene therapy impressed.
  • Treatment shows effectiveness in often deadly condition.
  • Investors may want to track other key clinical trials
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Investors may want to closely monitor the results of a phase 3 clinical trial of Merck & Co. Inc.'s (

MRK, Financial) pill designed to protect patients from Covid-19’s most severe health impact. Results from the testing of molnupiravir could come as early as September, according to an article in BioPharma Dive.

If tests prove the treatment is effective and does gain regulatory approval, it would likely have a big advantage over competitive medications from Regeneron Pharmaceuticals Inc. (

REGN, Financial), Eli Lilly and Co. (LLY, Financial) and Vir Biotechnology Inc. (VIR, Financial), all of which must be administered intravenously. Molnupiravir is being co-developed with privately-held Ridgeback Biotherapeutics.

A drug approval can mean a higher stock price, points out Zacks, but each company and authorization needs to be viewed in proper perspective so the investor doesn’t have regrets. For example, drugs for cancer and diabetes would likely be big sellers. A treatment for allergies would probably not, though depending on the size of the developer, it could have a significant impact on the company’s bottom line and share price.

Merck’s clinical trial is one of eight key studies on which results may be reported during the rest of 2021. In terms of market value, the smallest company to make the list is UniQure (

QURE, Financial), valued at about $1.4 billion. Based near Boston, the biotech is testing a treatment for Huntington's disease that is similar to one from Roche (RHHBY, Financial). Huntington’s is a degenerative neurological condition with no effective treatments for its underlying cause.

Several once-promising medications for Huntington’s have flopped. In March, three programs were shut down — one from partners Roche and Ionis Pharmaceuticals Inc. (

IONS, Financial) and two from Wave Life Sciences Ltd. (WVE, Financial).

UniQure hopes data it plans to reveal later this year reverses the trend, demonstrating that its medication works as intended.

Other companies expected to release important clinical trial results during the second half of the year are:

Intellia Therapeutics (

NTLA, Financial)

To see what impact successful study outcomes can have on a company’s stock, look no further than Intellia Therapeutics Inc. This past Saturday, positive results of the company’s gene therapy to treat transthyretin amyloidosis were published in The New England Journal of Medicine. Investors responded by bidding the stock up nearly 50% Monday to more than $131. ATTR is an often deadly condition that can cause damage to the heart and nerves. If Intellia’s drug continues to demonstrate effectiveness in the ongoing trial and is eventually approved, it will likely challenge approved treatments from Alnylam Pharmaceuticals Inc. (

ALNY, Financial), Ionis and Pfizer Inc. (PFE, Financial).

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Arcus Biosciences (RCUS) and Gilead Sciences (GILD)

A new class of antibody drugs that block a protein called TIGIT are showing promise in treating cancer by increasing the effectiveness of oncology drugs. Arcus Biosciences Inc. is set to reveal phase 2 results for its TGIT blocker in two-to three-drug combinations for treating lung cancer. Gilead Sciences Inc. stands to benefit from a good showing because the company has several options to license the drug among others from Arcus.

Sanofi (SNY) and GlaxoSmithKline (GSK)

The alliance between pharma giants Sanofi SA and GlaxoSmithKline PLC to develop a Covid-19 vaccine failed, but the companies are looking to make a comeback with an upgraded vaccine that is in phase 3 testing. Results are expected in the fourth quarter. If the tests prove it works, the vaccine could be used in areas where innoculations aren’t readily available and as a booster for people who have received other shots.

Mirati Therapeutics (MRTX)

This San Diego-based biotech is one of the companies that has advanced drugs being tested for KRAS, the most frequently mutated gene in cancer. Later this year, Mirati Therapeutics Inc. is expected to show data that could lead to an application to the Food and Drug Administration for approval. Should clinical trial results show the drug is superior to one from Amgen Inc. (AMGN), the company could see its valuation skyrocket.

Seres Therapeutics (MCRB)

Almost a year ago, Seres Therapeutics Inc. became the first company to report successful results from the pivotal trial of a so-called microbiome drug, a treatment for a type of recurring bacterial infection, according to BioPharma Dive. Finch Therapeutics Group Inc. (FNCH) and privately held Rebiotix have reported positive findings for similar treatments. But microbiome therapeutics could have broader applications, and Seres is expected to soon report data from a clinical trial for the drug in mild-to-moderate ulcerative colitis, a form of inflammatory bowel disease affecting about 1 million Americans.

Disclosures

I am/we are Long LLY, GILD, SNY and AMGN.
The views of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com
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