Investing in development-stage biotechs is not for the faint of heart. But with these stocks, the higher risk can deliver fantastic returns.
With biotechs, success is dependent on the pipeline. An approval or positive trial results can send these stock soaring, while negative results can send shares crashing.
These two biotechs both have promising candidates in their pipeline, and analysts say both could climb much higher this year.
Celldex Therapeutics (NASDAQ: CLDX)
Celldex Therapeutics (NASDAQ: CLDX) is a development-stage biotech focused on the development and commercialization of immunotherapy technologies and other cancer-targeting biologics.
The company announced back in November 2018 that it had completed a Phase 1 dose-escalation study of CDX-1140, an agonist anti-CD40 antibody.
“We have completed four of the potential eight monotherapy dose levels and, to date, CDX-1140 has been well tolerated,” Tibor Keler, Chief Scientific Officer of Celldex, said in a press release. “Importantly, we are observing dose-dependent biological effects consistent with CD40-mediated immune cell activity. Based on these positive findings, we have expanded development of the program and recently initiated a combination cohort with CDX-301, our dendritic cell growth factor, to increase the number of dendritic cells which are critical to initiating antitumor immunity and a key target for CDX-1140.”
That’s good news for Celldex, and the biotech’s co-founder, president, and CEO, Anthony Marucci, said in the company’s Q3 report that the development of CDX-1140 was promising and that they “remain encouraged by the safety and biological profile we have observed to date.”
“We are very interested to explore the potential of CDX-1140 in the presence of greater dendritic cell activity,” Marucci said.
The next big pipeline milestone will come this quarter when the company expects to report data from the first stage of the phase 2 study of its other treatment, CDX-3379, in advanced head and neck squamous cell cancer.
The key to Celldex’s success depends on its pipeline candidates. If the current clinical studies deliver positive results, this stock could rocket far higher. Analysts are bullish on the stock and their average twelve month price target for CLDX is $40, indicating possible upside of 633.94%.
Intercept Pharmaceuticals (NASADQ: ICPT)
It has been five long years, but Intercept Pharmaceuticals (NASADQ: ICPT) has finally released top-line results from its Regenerate study for its lead drug, Ocaliva.
Ocaliva has already been approved for the treatment of primary biliary cholangitis, but the Regenerate trial was meant to expand the treatment to the 20 million patients with NASH—nonalcoholic steatohepatities—a disease for which there are currently no FDA approved treatments.
The trial showed that the patients who took 25mg of Ocaliva daily were nearly twice as likely to achieve a fibrosis score improvement of one stage or better without worsening NASH symptoms. The drug didn’t quite resolve NASH symptoms, but the observed fibrosis improvements are likely strong enough to support an approval.
Intercept plans to file for approval of Ocaliva for the treatment of NASH in the U.S. and Europe in the second half of this year, thus we won’t see an approval until mid-2020 at the earliest. In the meantime, investors will be watching for any interim news and the company will present Ocaliva results in further detail at the International Liver Congress in April.
The average price target for ICPT is $154.59, suggesting possible upside of 43.68% over the next twelve months. Just last week, Wedbush rated the stock an Outperform and boosted their price target to $248 – 145% higher than the price as of this writing.