3 Big Drugmakers With Huge Catalysts on the Horizon

Big companies can make big moves, but they don’t necessarily end up making big changes to their stocks. Sometimes, though, they do. Cory Renauer, writing for The Motley Fool, examines three big biotech companies that have big catalysts this year that could have a, you guessed it, big effect.

1. AbbVie

The Chicago-based company already caught everybody’s attention with its unexpectedly strong 2018 guidance revision. Much of the drama there was its announcement that, due to tax reform, its tax rate for 2018 will be 9 percent, significantly lower than the expected 20 percent. That gives the company plenty of wiggle room to invest in infrastructure, compensation, dividends, and mergers and acquisitions.

But what Renauer is focusing on is April, when AbbVie and its development partner, Neurocrine Biosciences, are expecting the U.S. Food and Drug Administration (FDA) to give a thumbs-up to its Elagolix for pain associated with endometriosis. The FDA had given it priority review in October 2017 for this hormone therapy that slows uncontrolled cell growth—which is essentially what endometriosis is, extra tissue growth outside the uterus.

Renauer writes, "Solid efficacy results, plus a dearth of effective pain-management options that don’t involve addictive opioids, are key factors expected to eventually drive annual Elagolix sales above $1.5 billion if the drug earns approval. While we’re waiting for the FDA’s approval decision concerning endometriosis pain, AbbVie and Neurocrine are expected to report results for a late-stage study designed to expand Elagolix to treat heavy menstrual bleeding associated with non-cancerous growth in the uterus."

2. Celgene Corporation

On January 22, Celgene bought Seattle-based Juno Therapeutics for $9 billion, which pushes the company deep into CAR-T and T-cell receptor (TCR) therapies.

Although that will undoubtedly create some catalysts in immuno-oncology, the near-term catalyst is Celgene’s Ozanimod, an anti-inflammatory as a possible treatment for irritable bowel disease, Crohn’s disease and multiple sclerosis.

Renauer writes, "Ozanimod is in the same class as an available oral multiple sclerosis (MS) drug called Gilenya from Novartis. Although the two haven’t been compared in a head-to-head trial, their performances compared to a standard MS treatment appears too similar to support management’s believe that ozanimod is a best-in-class drug that can generate peak annual sales in the $4 billion to $6 billion range. That means investors will want to keep their eyes peeled for results from ozanimod’s pivotal trial with Crohn’s disease patients, which Celgene plans to present in detail during a scientific conference in mid-February."

3. Gilead Sciences

It’s regularly noted that Gilead’s treatments for hepatitis C have done such a good job of curing the disease that it’s made for a smaller pool of potential clients. It’s also being nibbled at by AbbVie and other competitors. Which puts an emphasis on Gilead’s HIV franchise. The company’s drugs for HIV do a great job at managing the disease, but they’re not a cure, so patients require treatment for their entire lives.

At the moment, all eyes are on its bictegravir-containing triple combination, which is projected to exceed $5 billion in sales by 2022. The FDA is expected to make a decision on or before February 12. Renauer writes, "A thumbs-up seems likely, but the combo’s ability to compete with GlaxoSmithKline’s recently launched Juluca remains an important question mark. If Gilead’s drug is approved, investors will still need to keep their eyes peeled for signs of a successful launch into a competitive environment."

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