Since the stock market bottomed in March, one of the fastest-climbing sectors has been the pharmaceuticals. These issues can be explosive. Pending approval from the necessary regulatory bodies, pharmaceutical developers can see their shares double or triple in value - or even better.
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The following issues are among the best-performing stocks year to date in the Russell 3000, up anywhere from 400% to 2000% in that period.
Vanda Pharmaceuticals (Nasdaq: VNDA) stock has climbed nearly 2000% since the New Year began, most of it directly after receiving approval from the FDA for its patented schizophrenia treatment. Since then, the stock has held up strongly. Just last week Vanda announced it was teaming up with pharmaceutical giant Novartis AG (NYSE: NVS) to develop its product, Fanapt, for commercial use in the U.S. and Canada.
The market for similar anti-psychotic medications in North America is $14 billion.
Swine Flu Vaccine
BioCryst Pharmaceuticals (Nasdaq: BCRX) is another fast-moving biotech with a number of drugs in its portfolio, each at a different phase of the FDA approval process. The company develops treatments that block enzymes involved in cancer, viral infections and auto-immune diseases.
BioCryst stock is up almost 700% year to date and could continue to benefit from delays in the government's approval of an H1N1 vaccine. The company's "Permavir" intravenous treatment is seen as the most likely candidate to be chosen as it is furthest along in government-sponsored trials of potential flu inhibitors. Permavir has already been approved for emergency use in hospitals.
OncoGenex Pharmaceuticals (Nasdaq: OGXI) has overcome several major clinical hurdles this year in advancing its lead drug, OGX-011, for treating advanced prostate cancer. The company is now on the hunt for a partner to bring the drug to production at the commercial level and then to market. OncoGenex is up 935% year to date.
One Of The Biggest
Human Genome Sciences (Nasdaq: HGSI) has a market capitalization in excess of $2.6 billion and numerous drugs at various stages of the regulatory process. Three of its products are currently at the very end of that pipeline and stand to be commercially viable in the near term: one for hepatitis C, one for lupus and a third for inhalation anthrax.
For its lupus treatment, the company has already partnered with U.K. drug giant Glaxo SmithKline (NYSE: GSK). HGSI is up over 800% year to date.
The Wrap
Pharmaceutical breakthroughs and regulatory approvals have, in the last year, put several smaller research-and-development companies on the investment map. Once production is ramped up and markets have been successfully tapped, the above-named outfits could see plenty of further upside. (For related reading, check out Pharma Patent Trolls: Cheap Drugs At A Steep Price and Using DCF In Biotech Valuation.)
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