Biotechs just won October.
The IBB iShares Biotechnology ETF is up 8.65% over the last month, while the S&P 500 only gained 2% for the month. The IBB also had its best month since January when it jumped 13.75%.
Shares of Amgen were up after the company delivered an earnings beat earlier this week. It reported earnings per share of $3.27 on revenue of $5.7 billion, compared to analyst expectations of earnings per share of $3.53 on sales of $5.6 billion.
Amgen then jumped again on Thursday after announcing that it was taking a $2.7 billion stake in BeiGene, and will team up with the Chinese biotech to commercialize some of Amgen’s cancer drugs to be sold on the Chinese market as well as working with BeiGene on developing 20 new drugs from its cancer pipeline in China and elsewhere. The deal is expected to close in early 2020 and will give Amgen a solid footprint in China’s rapidly growing pharmaceutical market.
“For a number of years, we’ve had as one of our key focuses for the company building out the business globally,” said Amgen CFO David Meline. “This is an important piece that was remaining for us, and we think that will fill out that chessboard, if you will.”
Celgene, meanwhile, jumped after it topped estimates in its Q3 report. The biotech reported net income of $1.691 billion, or $2.32 per share, in the quarter, up from $1.082 billion, or $1.50 per share, in the same period last year.
“We are continuing to advance multiple high-potential medicines toward regulatory approvals and look forward to closing the Bristol-Myers Squibb (NYSE: BMY) transaction by the end of the year,” said CEO Mark Alles. Celgene and Bristol-Myers Squibb announced their merger back in January.
Biogen shares skyrocketed last week after the company stunned the market by announcing that it was seeking regulatory approval for an Alzheimer’s drug, aducanumab, that it had shelved earlier this year. Biogen had discontinued the clinical studies of aducanumab five months ago after the drug failed in clinical trials, which saw the stock sink -29% in a single day back in March, and has plagued the stock ever since.
But Biogen now says that new analysis of a larger data set showed that aducanumab actually did work and was successful in reducing clinical decline in patients with early stage Alzheimer’s.
“With such a devastating disease that affects tens of millions worldwide, [this] announcement is truly heartening in the fight against Alzheimer’s. This is the result of groundbreaking research and is a testament to Biogen’s steadfast determination to follow the science and do the right thing for patients,” said Biogen CEO Michel Vounatsos. “We are hopeful about the prospect of offering patients the first therapy to reduce the clinical decline of Alzheimer’s disease and the potential implications of these results for similar approaches targeting amyloid beta.”
The company is now planning to file a Biologics License Application with the FDA early next year, and if approved, aducanumab will be the first drug approved to reduce the clinical decline of Alzheimer’s disease, and would be a blockbuster drug for Biogen as the disease impacts 50 million people globally.
Vertex Pharmaceuticals (NASDAQ: VRTX) also surged higher in October, and is up nearly 15% for the month. Vertex made headlines this month after announcing that its long-awaited cystic fibrosis treatment, Trikafta, had received FDA approval just three months after filing its New Drug Application, five months sooner than expected.
The Boston-based biotech also posted strong Q3 results this week, generating $949.8 million in revenue, representing a 21.1% year-over-year increase.
Vertex “continues to successfully execute on our strategy of creating transformative medicines for serious diseases through serial innovation,” said Chairman and CEO Jeffrey Leiden. “The rapid progress of our pipeline is expected to yield proof-of-concept data in multiple diseases in 2020, which will position Vertex for continued growth in the years ahead.”
And then there’s Reata Pharma (NASDAQ: RETA). Shares of Reata are up a jaw-dropping 166% over the last month after the biotech released positive data for its mid-stage Moxie study for its drug candidate, omaveloxolone, for patients with the neuromuscular disease Friedreich’s ataxia. Reata will now discuss the findings with the FDA to see if the data from the Moxie trail is enough to gain approval. Given the unmet need for patients with Friedreich’s ataxia, an accelerated approval for omaveloxolone looks likely.
Achillion is up 70.5% for the month after rare disease drug giant Alexion Pharmaceuticals issued a $930 million all-cash offer for the clinical-stage biotech. While Aclaris is up nearly 67% over the last month after it announced positive results from its Phase 3 clinical trial for an investigational new drug for the treatment of common warts. And clinical-stage biopharma company Ra Pharmaceuticals is up a stunning 99.2% in the last month after news broke that it has agreed to be acquired by UCB, a global biopharmaceutical company based in Belgium, with a valuation of roughly $2.5 billion.
While these biotechs have had huge returns over the past month, there are only three that analysts say have significant upside ahead. Analysts are bullish on Vertex, Achillion Pharmaceuticals, and Aclaris Therapeutics, and their consensus price targets indicate possible upside over the next twelve months of 15.48%, 34.95%, and 185.71%, respectively.