Clinical updates can provide major catalysts for pharmaceutical and biotech stocks. In this Motley Fool Live video recorded on June 30, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss some late-stage clinical readouts on the way this year that investors should closely watch.
Keith Speights: Brian, several drugmakers have pretty important phase 3 data readouts on the way in the third quarter, or around the third quarter. Are there any that you think investors should especially watch closely?
Brian Orelli: Narrowing it down to one quarter is a little bit difficult because companies obviously sometimes don’t give you that specific of timing. A lot of times, it’s “the second half of the year,” or even “in 2021,” but it hasn’t happened yet, so we know it’s going to happen soon, but we don’t know exactly when.
I’ve been looking at the new immune checkpoint inhibitors. We haven’t had a big win since the PD-1s came on the market quite a few years ago. Novartis (NYSE:NVS) has an antibody targeting TIM-3 called sabatolimab that’s scheduled to read out a phase 2 trial in myelodysplastic syndrome in the second half of the year. That’s one that I’m definitely looking at.
Biogen (NASDAQ:BIIB) and Sage Therapeutics (NASDAQ:SAGE) have more data on Zuranolone. They had phase 3 data earlier this month, I think, from the WATERFALL study in major depressive disorder.
The data was mixed. It passed the clinical trial, but investors were worried about the magnitude of the results and whether there would be a long-term effect. They have a second phase 3 called LANDSCAPE, also in major depressive disorder, that combines their drugs with an antidepressant compared to an antidepressant alone.
Maybe you get less of a placebo effect for that comparison because now everybody knows that they’ve got the drug — some people got two drugs and some people only got one drug, but everyone knows they’re getting at least something to help them benefit. Maybe that helps us see the true benefit of Biogen and Sage’s drugs.
They’re also testing the drug in a phase 3 clinical trial called NEST, which is in postpartum depression, and I think readouts for both of those are expected this year, or maybe they’ll get moved into the beginning of next year.
Pfizer (NYSE:PFE) and Roche (OTC:RHHBY) have data upcoming for their gene therapy to treat hemophilia B. The timing is a little less certain, but maybe it’ll come in this year, maybe toward the beginning of next year.
They’re going to be looking at 12-month data. What you’ll be looking for here is an expression of factor IX, which is what hemophilia B patients are missing, and then also, annualized bleed rates are going to be important, at least over the first 12 months.
It’ll compete with UniQure (NASDAQ:QURE), which already has a gene therapy that’s already read out phase 3 data for one-year expression. The expression of factor IX was at 41.5% of normal and the annualized bleed rates were reduced by 85%, so that’s the level that Roche and Pfizer are going to need to meet or exceed.
UniQure has come out and said that the FDA now wants 18-month data before they can submit to the FDA, so it seems likely that Pfizer and Roche might actually need that 18-month data too. So we should be looking not only at the data, but what [are] Pfizer and Roche saying about when are they going to be able to file for FDA approval for their gene therapy.
Speights: Brian has been covering the biotech space for a long time, so if you’re interested in biotech stocks, these are some clinical readouts you’ll definitely want to pay attention to since they’re on his radar screen.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.