The more popular sectors on the TSX are banking, energy, utilities, technology, and the burgeoning cannabis sector, but one sector that is rarely mentioned is biotechnology.
Biotech names appear on investors’ radars when a company is on the verge of obtaining approval by the Health Products and Food Branch (HPFB) of Health Canada (U.S. FDA counterpart) for a blockbuster drug in the making.
Likewise, most clinical-stage biopharmaceutical companies are not making money until the launching of lead drug candidates in the market. Bellus (TSX:BLU) from Laval, Canada, is flying under the radar. This biotech stock could soon be the top biotech stock on the TSX.
Lead drug candidate
Bellus, a $516 million clinical-stage biopharmaceutical company, is presently developing novel therapeutics for the treatment of chronic cough and other hypersensitization-related disorders.
BLU-5937 or the treatment of chronic cough and chronic pruritus is the company’s lead drug candidate under development. The drug is a highly selective P2X3 inhibitor that has the potential to be a differentiated treatment option for patients suffering from either condition.
It’s hard to understand the medical terms or acronyms, but simply knowing what the drug is supposed to treat is enough. Bellus is hoping that BLU-5937 is the drug that will cure chronic cough. In the U.S. alone, about 26 million adults suffer from a chronic cough that can last for more than eight weeks.
More than 2.6 million are already suffering from a chronic refractory cough that could extend for more than a year. It’s worrisome that chronic cough brings with it adverse physical, social, and psycho social effects on health and quality of life.
In the case of chronic refractory cough, treatment options are limited. Likewise, there is no approved specific therapy yet. Canadians suffering from the same chronic cough should hope that Bellus’ drug has the potential to be a differentiated treatment option for chronic cough.
Bellus is performing remarkably well thus far this well. The stock’s year-to-date gain is 147.55%. Moving forward, analysts covering the stock see no downside in the next 12 months. Also, the recommended buy rating since September remains unchanged.
Right now, the same analysts are forecasting a high estimate of $52.92, or a jump of 475.2%. BLU-5937 is a new innovative therapy, and Bellus is conducting more research and development for the rest of 2019.
Bellus is optimistic that the outcome of the clinical trials for BLU-5937 would result in potential therapeutic value. It should also outweigh the risks associated with the drug’s use.
If Bellus file a “New Drug Submission” with HPFB, it means the biotech firm is sure about the drug’s safety, effectiveness, and quality. BLU-5937 is just one of Bellus’ products in the pipeline. However, the drug could be the best-in-class therapeutic for the treatment of chronic cough.
Bellus is sitting one a gold mine that could deliver billions in sales. The top-line results could be out by mid-2020. Meanwhile, if you’re on the lookout for top-performing stocks to include in your portfolio, Bellus is one of the recommended choices.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Christopher Liew has no position in any of the stocks mentioned.