2023 May Be the Year the Biotech Sector Cures Itself of Malaise
A pivotal point for biotech stocks seems to have been reached. It’s almost mid-2023, and barely a week goes by without news driving a biotech company’s stock price upward to gain returns that one would expect to take years to achieve in a broad basket index position. The most recent news causing this price action is yet another clinical-stage therapeutic company. Shares of PDS Biotech are up 27% since yesterday and 41% month-to date. This week’s move is attributable the company reporting positive trial results.
PDS Biotechnology (PDSB) is a clinical-stage immunotherapy company with a developing pipeline of targeted immunotherapies for cancer and infectious disease.
The impetus for the price move was the announcement of interim data from a Phase 2 trial investigating its PDS0101 in combination with Merck’s KEYTRUDA®. The trials were in patients with unresectable, recurrent or metastatic human papillomavirus head and neck cancers.
The results were quite positive and will be featured in a poster presentation and in a head and neck cancer expert panel discussion at the 2023 American Society of Clinical Oncology (ASCO) Annual Meeting being held June 2-6 in Chicago.
These are highlights of the results showing the interim data of the efficacy of PDS Bio’s PDS0101 in combination with KEYTRUDA®:
The estimated 12-month overall survival rate was 87.1%. Published results are 36-50% with approved ICIs used alone*.
- Median progression-free survival was 10.4 months (95% CI 4.2, 15.3). Published results are median PFS of 2-3 months for approved ICIs when used as monotherapy in patients with similar PD-L1 levels*.
- A disease control rate (disease stabilization or tumor shrinkage) of 70.6% (24/34)
- Confirmed and unconfirmed objective response rate was 41.2% (14/34 patients), which is identical to the preliminary response rate data PDS Biotech previously reported at ASCO 2022 (7/17 patients). To date these responses have been confirmed in nine of the 34 patients (26.5%), including one complete response.
- 15/34 patients (44.1%) had stable disease.
- 9/34 patients (26.5%) had progressive disease.
- 4/48 (8.3%) of patients had a Grade 3 treatment-related adverse event (TRAE). No Grade 4 or higher TRAEs were observed.
A main driver of the stock market enthusiasm can be found in the safety and efficacy results in the interim data. “This data showed an estimated 12-month survival rate of 87% and a progression-free survival of 10.4 months, which is very encouraging given the poor prognosis these patients face,” stated Lauren V. Wood, M.D., PDS Biotech’s Chief Medical Officer and a co-author of the study. “Furthermore, we remain encouraged by the safety profile of PDS0101 in combination with KEYTRUDA®, with only 8% of patients experiencing a Grade 3 treatment-related adverse event without more serious Grade 4 or 5 events. We believe these data are encouraging for HNSCC patients and indicate that the addition of the HPV16-targeted immunotherapy PDS0101 to KEYTRUDA® should be further evaluated for its potential to enhance survival in HPV16-positive head and neck cancer patients.”
To understand the company PDS Biotechnology better, visit the research page on Channelchek, and also review this Channelchek video that shares key information about PDSB.
The Nature of Biotech Investing
Drug discovery and development is a long, uncertain path that often takes 10–15 years, with costs that could exceed $1–2 billion for any new drug ultimately approved for clinical use. Unlike unregulated products, it’s a significant achievement for a candidate to get as far as clinical trials. Attaining interim results showing high efficacy and tolerance is a very positive sign and one that will most often cause a large price jump. Negative results can have the opposite effect.
Events that cause small-cap biotech stocks to experience significant price jumps could include:
- Positive clinical trial results: As with PDS Biotechnology, when a small-cap biotech company releases positive clinical trial results, it can generate significant investor interest and drive up the stock price.
- FDA approvals: Taking is a step further, FDA approvals of drugs or medical devices can significantly boost a small-cap biotech company’s stock price, as it can open up a new revenue stream for the company.
- Partnerships and collaborations: Partnerships and collaborations with larger companies can cause a small-cap biotech stock to rise as it indicates a level of validation for the company’s technology or products, and provide needed funding to bring research and development along the lengthy timeline.
- Acquisition rumors or deals: When rumors or announcements of an acquisition by a larger company circulate, it can cause a small-cap biotech stock to rise as investors anticipate a potential buyout premium.
- Analyst upgrades: If an influential analyst upgrades their rating on a small-cap biotech stock, it can increase investor interest and drive up the stock price.
Companies You May Want to Watch
There is data and information on well-over 200 small-cap biotech companies on Channelchek. Below is a select group that investors may want to follow.
Cocrystal (COCP): Cocrystal Pharma, Inc. is a clinical-stage biotechnology company discovering and developing novel antiviral therapeutics that target the replication process of influenza viruses, coronaviruses, hepatitis C viruses and noroviruses.
Axcella (AXLA): Axcella is a clinical-stage biotechnology company pioneering a new approach to treat complex diseases using endogenous metabolic modulator compositions. The company’s product candidates are comprised of EMMs and derivatives that are engineered in distinct combinations and ratios to reset multiple biological pathways, improve cellular energetics, and restore homeostasis.
Tonix Pharmaceutical (TNXP): Tonix is a clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring and developing therapeutics to treat and prevent human disease and alleviate suffering. Tonix’s portfolio is composed of central nervous system, rare disease, immunology and infectious disease product candidates.
Onconova Therapeutics (ONTX): Onconova Therapeutics is a clinical-stage biopharmaceutical company focused on discovering and developing novel products for patients with cancer. The Company has proprietary targeted anti-cancer agents designed to disrupt specific cellular pathways that are important for cancer cell proliferation.
MAIA Biotechnology (MAIA): MAIA is a targeted therapy, immuno-oncology company focused on the development and commercialization of potential first-in-class drugs with novel mechanisms of action that are intended to meaningfully improve and extend the lives of cancer patients.
Ocugen (OCGN): Ocugen, Inc. is a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies and vaccines that improve health and offer hope for patients across the globe. The company impacts patient’s lives through innovation that forge new scientific paths.
PDS Biotechnology (PDSB): This was positive news for PDS Biotech, but there work isn’t finished and they have other immunotherapy products in their pipeline based on proprietary T cell-activating technology.
Take Away
As we approach the halfway point of 2023, biotech stocks that had traded sky-high during the pandemic era had been paid far less attention to since. But the tide appears to be turning as news such as that reported by PDSB, and partnerships and even acquisitions have been on the rise.
It’s an interesting sector that, for better or worse, is barely correlated with the rest of the stock market.
Managing Editor, Channelchek
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