In the past 30 years, hundreds of thousands of people have
been given a second chance after battling cancer. Many of these
cancer survivors have long been in remission, but there's still
reason for concern.
Cancerkills more than 500,000 Americans everyyear , and that
figure is dropping by less than 1% a year, as I noted in my first
look at the war on cancer. Yet there's a growing sense of
excitement among cancer surgeons because of promising
breakthroughs, thanks to new and novel approaches.
To be sure, some of these breakthroughs can seem quite
promising in the early stages of clinical testing, only to appear
less effective or more dangerous as clinical trials are expanded.
Still, very few new treatments get a thumbs-up from the Food and
Drug Administration (FDA) each year, and in some instances, can
go on to save thousands of lives -- and generate ample profits
Much of the leading-edge cancer research is being conducted by
major drug companies that possess billion-dollar research
budgets. For example,
Roche Holdings (
are all focusing on reversing changes in the cell mutation
process, which may be applicable to many types of cancers, The
New York Times has reported.
Even promising cancer drugs can sometimes bring side effects so
awful that the FDAwill either refuse to approve the drugs or
greatly restrict their use. Thankfully, a new class of drugs
known as antibody-drug conjugates (ADC) are hitting themarket
that help existing drugs focus more on tumors and away from other
Seattle Genetics (Nasdaq: SGEN)
is currently the ADC leader. Its Adcetris drug, which was
launched in 2011, is racking up more than $100 million in
annualsales . Licensing partners such as
could lift that figure much higher if their Adcetris-enabled
drugs currently in development come to market.
In a similar vein,
ImmunoGen (Nasdaq: IMGN)
is pairing its own ADC, known as DM-1, with popular drugs such as
Roche's Herceptin (in a combo drug known as TDM-1) to help boost
Herceptin's efficacy and reduce its toxicity. Other drugmakers
are also testing DM-1 with their own existing drugs, perhaps
giving second life to drugs previously deemed too toxic for most
Away from the industry's top headline makers, other major
breakthroughs are being pursued. Here's a look at three small
firms that are showing great promise in the battle against
Exelixis (Nasdaq: EXEL)
: This firm's Cabozantinib drug targets cancer by inhibiting the
growth of small-molecule cancer cells. The drug, which was
approved for the treatment of thyroid cancer in 2011, is
currently undergoing Phase III clinical trials for prostate
cancer. Ovarian, breast, lung and kidney cancers may also prove
to be good targets for this drug.
Still, thisstock is down from $11 in 2011 to a recent $5 on
concerns that Cabozantinib has had some safetyissues (six patient
deaths in one trial) along with possible competition from a rival
drug being developed by Bayer.
Nevertheless, it's important to track this company's progress.
Its entire drug development platform received a huge endorsement
in November 2011 when the National Cancer Institute agreed to
bankroll a number of studies for Cabozantinib. Although Exelixis
has drifted off of many biotech investors' radars, the company's
drug pipeline still appears to hold blockbuster potential.
Threshold Pharmaceuticals (Nasdaq: THLD)
: I first profiled this stock in October 2011 and provided a
deeper look at its Hypoxia-focused drug delivery technology a few
months later when Threshold signed a far-reaching distribution
deal with Germany's Merck KGaA (not to be confused with the U.S.
pharmaceutical giant of the same name). That deal led to a hefty
amount of upfront and ongoing milestone payments, which initially
ledshares to surge to $9. Since then, shares have steadily
What went wrong? Nothing, really -- except for the dawning
realization that Threshold's TH-302 technology was still several
years away from commercialization.
To recap, Threshold's TH-302 cuts off oxygen to tumors. This
targeted approach can focus on small areas, leaving surrounding
healthy tissue intact. Most competitive drug approaches have
Celgene's (Nasdaq: CELG)
Abraxane, which is currently in Phase III trials, has also shown
Investors should track the progress of Threshold's and
Celgene's drugs. There may well be room for both drugs in the
market, though an FDA rejection of Celgene's Abraxane may leave
this market all to Threshold. As is the case with any biotech,
Threshold carries considerable risk, but I remain convinced that
its TH-302 drug could be a blockbuster in the making.
Oncothyreon (Nasdaq: ONTY)
: Whenever a biotech firm's leading drug delivers poor Phase III
clinical trial results, shares can stumble badly.
That's precisely what happened to this company when marketing
partner Merck KGaA said in late 2012 that Oncothyreon's L-BLP25
failed to attack tumors as hoped. Oncothyreon's shares -- which
had briefly moved above $10 in summer 2011 -- collapsed on the
news; they now trade for around $2.50.
Yet this is a biotech firm worth tracking, as it has a number
of other drugs that are earlier in the clinical testing process,
some of which are yielding impressive results.
Oncothyreon is one of a handful of companies that are trying
to develop vaccines against tumors by generating immune system
response. (Our bodies don't usually see tumors as a problem, as
they evolve from regular cells and are not seen as alien
Another plus: Oncothyreon has more than $80 million incash ,
which should be enough to last into 2015 at current burn rates.
The rest of this year will see a series of clinical trial
updates, and positive data couldput this stock right back on
Risks to Consider:
Due to their high-risk/high-reward nature, biotechstocks
should individually compose just a small portion of your
Action to Take -->
Oncothyreon, Exelixis and Threshold are each pursuing
far-reaching drug platforms and not just one-hit wonders. It's
this broad-based approach that could help these stocks become the
biotech stars of tomorrow.
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