4 Biotech Stocks With Big Catalysts in September

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Cory Renauer, The Motley Fool

Updated Thu, Sep 5, 2019, 7:16 PM

Company	Stock Price Gain (Loss) in 2019	New Drug Candidate	Target	Market Cap
Amgen (NASDAQ: AMGN)	6%	AMG 510	KRAS-G12C	$123.6 billion
Mirati Therapeutics (NASDAQ: MRTX)	96%	MRTX849	KRAS-G12C	$3.3 billion
Eli Lilly (NYSE: LLY)	(2%)	LOXO-292	RET	$109.6 billion
Blueprint Medicines (NASDAQ: BPMC)	40%	Pralsetinib	RET	$3.7 billion

Data source: Yahoo! Finance, and company filings.

1. Amgen: An elusive target

The RAS gene family controls many aspects of cell growth and cell death, and for decades we've known about mutated versions of KRAS proteins that drive tumor growth. Unfortunately, stopping mutated KRAS proteins seemed impossible because scientists couldn't find any pockets for a drug to attach to.

Earlier this year, Amgen gave us a peek at phase 1 clinical trial results for an experimental cancer treatment that uses a new technique to inhibit KRAS proteins, and it appears to work. Investors cheered for Amgen's KRAS inhibitor, tentatively named AMG 510, when the company told us that five out of the first 10 evaluable patients with non-small cell lung cancer (NSCLC) experienced some tumor shrinkage and just one showed signs of disease progression.

The American Cancer Society expects around 118,000 Americans will lose their life to NSCLC in 2019, which makes it the deadliest malignancy of all. Around 14% of all NSCLC tumors test positive for KRAS proteins with the G12C mutation. That means continued success could drive sales of AMG 510 into the 10-figure zone within a few short years.

On Sept. 8, Amgen will hold a call with analysts following a presentation of more results from AMG 510's first clinical trial at the 2019 World Conference on Lung Cancer. While this is a very big deal, Amgen's already so large that an incredibly successful new cancer therapy won't move the entire needle forward very far. In fact, a company that isn't even presenting at the same conference will most likely rise or fall further than Amgen following the presentation.

Image source: Getty Images.

2. Mirati Therapeutics: Of Mice and Amgen

This June, Mirati Therapeutics was one of several biotech stocks that received more lift from AMG 510 data than Amgen, and further hints of success from the AMG 510 program could inspire investors to send Mirati shares higher still. That's because the only thing we know about Mirati's lead drug, MRTX849, is that it inhibits KRAS proteins with the G12C mutation in mice.

Mirati started MRTX849's human proof-of-concept study in January and doesn't expect preliminary results until the fourth quarter. Although Amgen's success has been responsible for pushing Mirati's shares to their present level, the first look at its own KRAS inhibitor could change how investors feel again.

This July, Novartis (NYSE: NVS) agreed to share costs of a human proof-of-concept study with its experimental SHP2 inhibitor, TNO155, in combination with MRTX849. So far, though, the collaboration partners haven't begun dosing patients with MRTX849.

3. Eli Lilly: An $8 billion bet on RET

Tumors with rearranged during transfection (RET) fusions and mutations are found in patients with a variety of malignancies, including lung cancer. On Sept. 9 at the World Conference on Lung Cancer, Eli Lilly will announce results from a study with LOXO-292 and patients with RET fusion-positive lung cancers.

Eli Lilly acquired Loxo Oncology and LOXO-292 in February for $8 billion after a look at some promising early data with its RET inhibitor and heavily pre-treated RET fusion-positive NSCLC patients. During the study, 25 out of 37 patients enrolled showed signs of tumor shrinkage, including four patients with tumors that had spread to their brains.

Lilly is going to present results of the Libretto-001 trial intended to support a new drug application for LOXO-292, and possibly a commercial launch before the end of 2020. If results fall in line with previous observations, Lilly's stock will enjoy a bump while shares of a potential competitor could feel some pressure.

Image source: Getty Images.

4. Blueprint Medicines: The next targeted RET inhibitor?

Blueprint Medicines sent one new drug application for its first cancer therapy, avapritinib, to the Food and Drug Administration this June. In the first quarter of 2020, Blueprint intends to send regulators another application, this one for pralsetinib, the RET inhibitor formerly known as BLU-667. Blueprint's aiming for the first-line treatment of NSCLC patients with RET mutations.

In June, Blueprint showed us that 60% of evaluable patients with advanced NSCLC treated with pralsetinib during the Arrow study experienced tumor shrinkage. The company has expanded enrollment of treatment-naive NSCLC patients into the Arrow trial in an attempt to support a speedy new-drug-application submission in 2020.

Different dynamics

Unlike KRAS, there are a lot of multikinase inhibitors out there with some RET activity. That means success with LOXO-292 will only pour water on other RET-inhibitor programs. This includes Blueprint Medicines and pralsetinib.

We want to see lots of lifesaving new cancer drugs earn approval. That said, Blueprint investors won't be too upset if Lilly's RET inhibitor stumbles.

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