A pair of Canadian biotech stocks is set to rise from anonymity in the months ahead. You can start monitoring the companies or, better yet, take new positions before the coming of several catalysts for growth.
Canada is seldom mentioned as a world leader in biotechnology, but it is. The country has a vast network of research hospitals, laboratories, universities, and companies working in bio-health, bio-energy, bio-industrial technology, and agri-biotechnology.
But our focus is on Resverlogix (TSXV:RVX) and Theratechnologies (TSX:TH)(NASDAQ:THTX). The biotech couple is on the TSX 30 list. The recognition was due to the three-year returns of more than 160%. More so, the TSX want investors to know that the names on the list are growth stocks.
Both companies are future contributors to Canada’s innovation economy. Investors would also realize significant gains with the success of their leading drug candidates.
Resverlogix is a $209 million late-stage clinical biotechnology company dedicated to improving the lives of patients with chronic illnesses. This biotechnology company provides novel science, clinical, and value-based health solutions to crucial stakeholders comprising pharmaceutical, physician, and health payer groups.
The expertise is in the area of epigenetics. It is developing apabetalone (RVX-208) which is a first-in-class small molecule that is a selective BET (bromodomain and extra-terminal) inhibitor. BET inhibition is an epigenetic mechanism that can regulate disease-causing genes.
While Apabetalone demonstrated tolerability and safety, the top-line results of the BETonMACE trials did not meet the primary endpoint. It should be able to reduce major adverse cardiovascular events or MACE. The acronym pertains to cardiovascular death, non-fatal myocardial infarction, and stroke.
Despite the unsatisfactory primary results, Resverlogix will continue to advance the programs. It hopes to come out with the secondary and exploratory endpoints in the future. The stock is trading at $1 but the potential gain, based on forecasts, is 665% should the company report clinical trial success.
Theratechnologies is twice the size of Resverlogix but engages in addressing unmet medical needs to promote healthy living and improve quality of life among HIV patients. This $400 million specialty pharmaceutical company has several accomplishments in the past years.
It has two commercialized products known as EGRITA and Trogarz. EGRIFTA is for the reduction of excess abdominal fat in HIV-infected patients with lipodystrophy while Trogarz is an ibalizumab injection for the treatment of multi-drug-resistant HIV-1 infected patients.
Most of its EGRIFTA patients are in Canada, and the U.S. Trogarz is being used in the U.S. and soon in Europe, which is the second-largest pharmaceutical market in the world. With the cross-listing on the NASDAQ last October 10, the company would have a broader and diverse investor base that would fund future growth.
Theratechnologies’s promising candidate in the pipeline is a drug that aims to treat non-alcoholic steatohepatitis or NASH in HIV and certain types of cancers. In 2020, the growth estimate is 216.7%. According to analysts, the stock has a potential upside of 102% in the next 12 months.
Future biotech superstars
Thanks to the TSX 30, Resverlogix (rank 18) and Theratechnologies (rank 22) are now in the consciousness of investors. You can start keeping an eye on both stocks — the future giants in the biotechnology sector.
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.