These 4 Biotech Stocks Saw Big Updates: What Investors Should Know
A handful of biotech names that I have been highlighting saw major updates this week and investors need to stay up to date.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
I thought we should end the week by circling back on some biotech names that I have highlighted several times on these pages in recent quarters. All of these stocks have been featured at one time or another in my weekend covered-call trade columns. These concerns have seen some important news over the past week and I want to take the time to update my regular biotech readers around those events.
1. Vir Biotechnology
Let’s start with Vir Biotechnology VIR. This small-cap company is navigating a large collapse in revenues thanks to the end of the COVID-19 pandemic. However, the company has a massive net-cash balance that almost equals its market cap. Vir Biotechnology named a new chief medical office at the end of May and has several compounds in development. On Wednesday, the company reported positive mid-stage trial results for a candidate that is being evaluated to treat chronic hepatitis delta virus. The stock moved up nearly 20% in trading that day and hopefully this news starts to reset the dismal narrative that has existed around this stock for many quarters.
2. Halozyme Therapeutics
Halozyme Therapeutics HALO moved up over 12% in trading on Thursday after management raised its FY2024 revenue and earnings guidance on the strength of a new European patent. Even at a 52-week high, the stock is still not expensive at just over 13-times forward earnings based on the mid-point of the just-issued guidance revision.
3. Cytokinetics
Cytokinetics CYTK has been under pressure in trading in recent weeks after the company did a significant capital raise and the CEO stated the company was comfortable "going it alone" once its key candidate, a hypertrophic cardiomyopathy drug called aficamten, is likely approved late this year. This put the kibosh on hot and cold buyout rumors around this mid-cap company. On Wednesday, the stock moved up over 10% after the company disclosed there were serious discussions about a buyout from a larger pharma concern in late 2023. With projected peak sales of between $2 billion to $3 billion for aficamten and a market cap of just over $6 billion, I still like CYTK either as a standalone entity or an acquisition.
4. Viking Therapeutics
Finally, we have Viking Therapeutics (VKTX), another name that has been mentioned as a potential takeover target thanks to recent results from its GLP-1 weight loss drug VK2735. This stock fell roughly 10% on Wednesday after the company posted positive mid-stage trial results around a different compound VK2809, that is being evaluated to treat NASH, another huge market, potentially.
The sell-off seems out of place until you dig into the details around the conference call that followed. Despite several inquiries from analysts, management refused to give details either around next steps around development or a potential commercial partnership around VK2809 until it has had time to engage with the FDA and agree to a late-stage trial design. This prevented analysts from accurately modeling a developmental timeline around VK2809. And analysts don’t particularly like not being able to do that, I have found. I added some exposure to VKTX within my own portfolio via covered calls on the drop in the stock price.
At the time of publication, Jensen was long CYTK, HALO, VIR and VKTX.
