Pharmaceutical stocks often need just a single blockbuster drug to make their fortunes.
Though the definition varies, blockbuster drugs are those that generate annual sales of $1 billion or more. The biggest blockbuster drugs can even exceed $100 billion in lifetime sales.
All of the companies on this list have drugs in their pipelines which could eclipse the billion dollar revenue milestone.
A blockbuster drug may be enough to send a smaller company’s stock price skyrocketing. Yet, in a larger pharmaceutical firm, a succession of blockbuster drugs is necessary simply to keep prices stable. Investors should keep that in mind before buying into any of the equities on this list.
Nevertheless, these pharmaceutical stocks are on track to produce blockbusters:
- Mirati Therapeutics (NASDAQ:MRTX)
- Novartis (NYSE:NVS)
- Biohaven Pharmaceutical (NYSE:BHVN)
- BioMarin Pharmaceutical (NASDAQ:BMRN)
- Novo Nordisk (NYSE:NVO)
- Daiichi Sankyo (OTCMKTS:DSNKY)
- arGENX (NASDAQ:ARGX)
Pharmaceutical Stocks: Mirati Therapeutics (MRTX)
Mirati Therapeutics is a pharmaceutical company that focuses on oncology. Cancer costs the U.S. and the world untold sums. According to the CDC, in 2019 cancer was the second leading cause of death in the United States. Cancer comprises many different forms, and attacks multiple sites within the body. Therefore, there can be no single cure for cancer.
Mirati Therapeutics is currently in the running to commercialize a therapy against a cancer that is particularly difficult to treat. Adagrasib is a drug the company has developed, which may have particular efficacy in treating non-small cell lung cancer that exhibits a specific mutation.
KRAS G12C mutation positive cancers were once thought to be untreatable. However, there are several companies with promising therapies with the potential to soon hit the market. Drugs which treat once intractable diseases often become blockbusters, and there’s great potential for these types of pharmaceutical stocks. However, Mirati Pharmaceuticals is not alone in the race to treat KRAS G12C mutation positive cancers. According to FiercePharma, Amgen (NASDAQ:AMGN) looks likely to commercialize its drug, Sotorasib first. That might not be as bad as it appears.
That’s because there are clear indications that Mirati Therapeutics’ Adagrasib will prove more effective in the long run. It produced a higher response than Amgen’s drug and exhibits greater tumor reduction potential.
MRTX stock is down 12.5% in 2021, but analysts have it overweight with an average target price of $244.77
Novartis, like a few other pharmaceutical stocks, is off by roughly 12% since beginning 2021. Even so, the company has two potential blockbuster drugs in development: Kesimpta and Inclisiran.
Kesimpta is an injectable drug used to treat multiple sclerosis. The drug has recently received approval. Inclisiran is used to battle high cholesterol. Inclisiran is known commercially as Leqvio. Novartis is currently launching Leqvio in Germany for patients at high risk of cardiovascular disease. The U.K. launch is set to occur in the third quarter of this year, while the U.S. launch is facing setbacks.
The setbacks look to be related to production issues rather than efficacy. Inclirisan/Leqvio is manufactured at an Italian facility controlled by Corden Pharma. Process control related issues caused the FDA to delay the drug’s approval in December.
Novartis assumes that Kesimpta will be a growth driver during 2021. At the same time, the company recognizes that launches of both Kesimpta and Leqvio will require significant investments.
Biohaven Pharmaceutical (BHVN)
Biohaven Pharmaceutical has a potential blockbuster on the market in its migraine drug called Nurtec. Nurtec helps migraine sufferers return to normal functioning for up to 48 hours with a single dose. The drug was launched commercially in the U.S. in March of 2020. Furthermore, Nurtec accounted for $63.6 million in revenues during calendar year 2020. And the drug’s sales really took off in the fourth quarter. Nurtec pulled in $35.1 million in sales, which was a 98% increase over the third quarter.
Biohaven Pharmaceutical recorded no revenue in 2019. All of its 2020 revenues were attributable to Nurtec which was prescribed to 337,000 times during the period.
Biohaven Pharmaceutical CEO Vlad Coric believes that Nurtec competes in an addressable market that could grow to $4 billion-$5 billion annually in the U.S. alone, which makes this one of the most compelling pharmaceutical stocks.
BioMarin Pharmaceutical (BMRN)
BioMarin Pharmaceutical has an opportunity to occupy a significant corner of its market. That’s because BioMarin recently increased its production estimates in its gene therapy facility. BioMarin Pharmaceutical previously stated that it could treat up to 4,000 hemophilia A patients with its single dose drug. However, the company later upped that number to 10,000.
That’s an important number because it may mean that BioMarin can treat the entire U.S. population suffering from severe hemophilia A in two years. Existing hemophilia A therapies require repeated injections. BioMarin Pharmaceuticals Valoctocogene Roxaparvovec therapy is a single dose gene therapy. If it receives FDA approval, it will provide long-lasting effects with a single dosage.
The therapy costs between $2 million and $3 million. The current standard in the highly competitive hemophilia. Gene therapy costs about $700,000 annually but must be continued indefinitely.
Phase 3 study results for the gene therapy are expected in early 2021. Company CEO Jean-Jacques Bienaime expects 2020 revenues of around $2 billion to increase to as much as $10 billion within a decade.
Novo Nordisk (NVO)
Novo Nordisk launched type-2 diabetes drug Rybelsus in 2019. Full-year 2020 sales reached $305 million, which exceeded the expectations of many analysts.
Rybelsus is a glucagon-like peptide-1 receptor agonist (GLP-1RA) therapy and is the second from Novo Nordisk. The first such therapy was Ozempic which was launched in 2018. Novo Nordisk will have a strong opportunity to dominate the market over the coming decade with both drugs.
Researchers studying both semaglutide drugs have noted other interesting side effects:
“Our trial showed that among adults with overweight or obesity (without diabetes), once-weekly subcutaneous semaglutide plus lifestyle intervention was associated with substantial, sustained, clinically relevant mean weight loss of 14.9%, with 86% of participants attaining at least 5% weight loss.”
I cannot say if this opens up an additional sales channel in non-diabetic patients. Whether it does or does not remains irrelevant. Novo Nordisk looks to have struck gold with its newest diabetes therapies.
Daiichi Sankyo (DSNKY)
Enhertu is a drug that received FDA approval in December against interstitial lung disease. Additionally, the drug is indicated against HER2- positive breast cancer. The drug is approved for use in both Japan and the United States. It is indicated for use in patients who have received two or more anti HER2 based regimens previously.
As mentioned previously, a blockbuster drug is one that exceeds $1 billion in annual sales. Enhertu could eclipse that based on a prediction which pegs its 2024 sales at $2.4 billion. A monthly regimen of the drug cost $13,300 at launch.
SVB Leerink analyst Andrew Berens, M.D., predicted that the drug could reach peak sales of $2.5 billion annually. In one study, Enhertu reduced tumor size in 61% of cases and completely eliminated them in 6% of cases. The drug is also being evaluated for efficacy against non-small cell lung cancer and colorectal cancer. The obvious upshot here is that other potential large revenue streams may exist for Enhertu moving forward.
arGEN-X is a company and stock that had a great 2020. In early March of 2020 ARGX stock sat at $150. As of March 12, it sits above $309 per share. The company’s potential blockbuster drug is a severe autoimmune disease therapy called Efgartigimod.
The drug is closest to approval for use in treating myasthenia gravis. Efartigimod is also being reviewed for two other diseases and is in Phase 3 trials. It also is being studied in a Phase 2 trial. This means the drug could receive approval for four separate diseases. Investors are keenly following, as the revenue implications are intriguing.
Stifel analysts predict that peak sales of Efgartigimod for use in treating myasthenia gravis could reach $1.7 billion annually. Efgartigimod is nearest FDA approval as a therapy for that specified condition. That application alone would vault it into blockbuster territory. However, investors must remember that the drug is in two Phase 3 trials and another Phase 2 trial. That means revenue streams could peak much higher.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
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