The best real estate deal on the planet. Could you profit thanks to it?
Back in 1972, Congress included a special provision in the Public Buildings Amendments – otherwise known as Public Law 92-313. This overlooked law forces federal agencies to pay rent for the buildings they occupy. And thanks to a smart investment strategy,
You may not have heard of this disease before, but nonalcoholic steatohepatitis (NASH) effects around 20 million patients in the U.S., and has recently become the top reason patients are put on the liver transplant waitlist.
There are an estimated 100 million patients in the U.S. with nonalcoholic fatty liver disease (NAFLD). Patients with NASH are those who experience inflammation that leads to permanent liver damage – roughly a fifth of patients with NAFLD.
Currently, there are no approved treatments for NASH, but it is estimated that this sector could be worth upwards of $35 billion annually within the next two years. And the companies first to market with an effective treatment stand to rake in billions.
Several biotech companies have drug candidates to fight the disease, but the following three stocks are the top ones to watch in the NASH arena.
Gilead Sciences (NASDAQ: GILD)
Gilead Sciences (NASDAQ: GILD) is the most familiar name on this list.
According to Gilead’s Executive Vice President of Clinical Research, John McHutchinson, the pharmaceutical giant’s strategy for NASH is focused on therapies for the most advanced cases of the liver disease as these therapies will have the greatest impact on patients.
Gilead’s lead drug candidate for NASH is called selonsertib and is currently in a late-stage study. The company is expected to report results from this study early next year, and McHutchinson predicts that the drug, an ASK1 inhibitor, could be the first drug to win FDA approval for treating the disease.
McHutchinson also said that the company could follow up with another NASH treatment not long after selonsertib goes to market as the company is also evaluating combinations of its two other NASH candidates, FXR agonist GS-9674 and ACC inhibitor GS-0976, which are likely to advance to a phase 3 trial.
Analysts’ average twelve month price target for GILD is $88.27, indicating possible upside of 19% from Thursday’s closing price. However, Citigroup’s price target for the stock is $105, or 42% higher than current prices.
Intercept Pharmaceuticals (NASDAQ: ICPT)
Intercept Pharmaceuticals (NASDAQ: ICPT) is at the top of the heap of the drug companies working on treatments for NASH and is racing Gilead to be first to market with an approved treatment for NASH.
The company’s lead candidate, Ocaliva, has already been approved to treat one uncommon disease, primary biliary cholangitis, but the drug is also in late-stage clinical trials to expand its treatment to the 20 million NASH patients who currently lack treatment options.
In its mid-stage study of Ocaliva, 18% of patients who received the drug experienced resolution of NASH compared to just 5% in the placebo group. If Intercept is able to produce similar results in its ongoing Regenerate study of 2,370 patients, its likely the FDA will approve Ocaliva as the first treatment of NASH – assuming it beats Gilead to the punch.
If approved for the treatment of NASH, Ocaliva could see sales in excess of $8 billion within a few years, increasing Intercept’s current market cap of $3.1 billion several times over.
While Ocaliva surely won’t be the only NASH treatment on the market in the future, the company is miles ahead of the competition and could be the first NASH treatment to hit the market after Intercept reports the results of its phase 3 trial next year.
Just last month, Royal Bank of Canada issued a price target for the stock of $244 – 107% higher than Thursday’s closing price.
Madrigal Pharmaceuticals (NASDAQ: MDGL)
Madrigal Pharmaceuticals (NASDAQ: MDGL) broke onto the scene late last year after releasing solid data for its MGL-3196 candidate.
In early June, shares jumped over 90% after the company’s successful mid-stage results for the MGL-3196 NASH drug candidate, a thyroid hormone receptor-beta agonist. In the mid-stage study, 27% of patients given the drug candidate showed complete NASH resolution versus just 6% of patients given a placebo.
While both Gilead and Intercept are just a few months away from wrapping up trials for their respective drug candidates, Madrigal has yet to even start its trial and is still waiting for the FDA to approve it.
MGL-3196 did prove its ability to lower liver fat in patients with NASH in its mid-stage trial. But there’s not much evidence in the drug’s safety profile and the mid-stage study was done with a small pool of just 107 patients.
Madrigal has nothing to fall back on if there is any trouble with MGL-3196, and with no other candidates in its pipeline, the stock could come crashing down should MGL-3196 fail in trials, making this stock the riskiest bet on this list.
However, if MGL-3196 is able to demonstrate the same level of success with data from a larger trial without any safety issues, its market cap could soar well beyond its current $3.5 billion.
The average price target for MDGL is $321.14, suggesting potential upside of 35.34% over the next twelve months. Recently, Roth Capital boosted its price target for the stock from $210 to $400 – 68.8% higher than the current share price.