PreMarket Prep: Looking For Biotech Bargains With This Wedbush Analyst

Biotechnology is one sector that peaked ahead of the S&P 500 index.

While the S&P 500 index did not peak until January, the SPDR Biotech XBI peaked in February 2021 and is now 60% lower than its all-time high price ($174.79 vs. $66.50).

While many issues have lost even more of their value, there still may be bargains in the sector. Robert Driscoll, a senior vice president at Wedbush covering the sector, joined Wednesday’s PreMarket Prep Plus broadcast to discuss a few issues in his coverage area. His area of expertise is the small-cap oncology space.

Replimune Group Inc. REPL is a clinical-stage biotechnology company. It uses a proprietary Immulytic platform to design and develop product candidates that are intended to maximally activate the immune system against solid tumors. The company focuses on developing oncolytic immunotherapies for the treatment of cancer. The company's pipeline products include RP1, RP2, and RP3.

The company focused on viruses “designed to specifically attack the cancer cells and leave the normal cells unharmed,” Driscoll said. He is encouraged by some positive data regarding melanoma and non-melanoma skin cancers in early clinical studies.

The company is expecting to have more data on these drugs by the end of the year. In addition, the company has other drugs in the pipeline but will not have any data to report until next year.

His price target for the issue is $52.

Kura Oncology Group KURA is a clinical-stage biopharmaceutical company that engages in discovering and developing therapeutics for the treatment of solid tumors and blood cancers. It focuses on the development of small-molecule product candidates that target cell signaling pathways to drive the progression of various cancers.

The company has a lead product candidate, Tipifarnib, which is a farnesyl transferase inhibitor, in both solid tumors and blood cancers. It is advancing KO-947, a small molecule inhibitor of extracellular-signal-regulated kinase (ERK), as a treatment for patients with pancreatic cancer, colorectal cancer, non-small cell lung cancer and melanoma.

The company is researching a drug that treats a particular type of blood cancer, Acute Myeloid Leukemia or AML. Driscoll's expectation is that the drug will be successful in 30%-35% of patients that are treated with the drug. The company has an upcoming data point in the third quarter that will provide more information on the progress of the drug, he said. 

The company has over $400 million cash on hand, which should be sufficient through the end of 2024.

In addition, Driscoll provided detailed commentary on Tango Therapeutics Inc. TNGX and Day One Biopharmaceutical Inc. DAWN. 

The discussion with Driscoll from Wednesday’s broadcast can be found here.