Most biotech stocks have low visibility with investors because the risks are pretty high. Nonetheless, the TSX has several names worth watching in 2023. Bausch Health (TSX:BHC) has appreciated substantially from year-end 2022, and three more could break through the market soon.
You can consider taking positions in BELLUS Health (TSX:BLU), Fennec Pharmaceuticals (TSX:FRX), or Knight Therapeutics (TSX:GUD) while the stock prices are low.
Strong upward momentum
Despite poor market conditions and a challenging macro environment, Bausch Health continues to display strong momentum. At $12.46 per share, the trailing one-year price return is -59.11%. However, the biotech stock beat the market year to date at +46.59% versus +6.17%.
The $4.51 billion specialty pharmaceutical company is a spin-off of Bausch & Lomb’s eyecare business. Bausch Health also incorporates various businesses focused on gastroenterology, neurology, dermatology, and international pharmaceuticals.
Management believes its leading durable brands and core business segments are growth drivers that will help advance global health.
Game changer
BELLUS Health is advancing a potential solution for refractory chronic cough called Camlipixant, or BLU-5937. This lead product candidate could be the game-changer for this $1.3 billion drug development company. The healthcare stock trades at $10.39 (-6.23% year to date) but could soar through the roof once BLU-5937 obtains approval for commercialization.
According to management, BELLUS has initiated the CALM Phase 3 clinical program for refractory chronic cough. Two trials (CALM-1 and CALM-2) to evaluate the efficacy, safety, and tolerability of Camlipixant are running concurrently. The development program is critical as the future of treating cough rests with the company.
Important breakthrough
Fennec Pharmaceuticals focuses on children with cancer and experiencing hearing loss due to the effect of chemotherapy. The $326.42 million commercial-stage specialty pharmaceutical company develops PEDMARK, which is devoted to fighting ototoxicity in pediatric cancer patients who receive cisplatin-based chemotherapy.
The sodium thiosulfate injection is the first and only Food and Drug Administration (FDA)-approved therapy indicated to reduce the risk of ototoxicity associated with cisplatin in pediatric patients with localized, non-metastatic solid tumours. On January 31, 2023, the U.S. FDA granted Orphan Drug Exclusivity to PEDMARK.
Rosty Raykov, Fennec’s chief executive officer, said the approval represents an important breakthrough treatment option for the pediatric cancer community.” The stock is down 5.04% year to date ($12.43 per share), although the one-year price return is 73.85%.
Unique platform
Knight Therapeutics focuses on acquiring or in-licensing innovative pharmaceutical products for the home country and Latin America. Moreover, it acquires mature or “under-promoted” products from Big Pharma and licenses late-stage products.
The $583.46 million multinational specialty pharmaceutical company operates in Pan America, a unique platform with high-growth markets. Knight is involved in therapeutic areas such as oncology, hematology, infectious diseases, and other specialties.
Exelon, its top prescription product, is for the symptomatic treatment of mild to moderately severe dementia in people with Alzheimer’s and Parkinson’s disease. If you invest today, the share price is $5.12 (-1.16% year to date).
High risk. Tremendous reward
The profitability of biopharmaceutical companies depends mainly on the successful results of clinical trials and the proven effectiveness or safety of their lead drug candidates. From an investment perspective, the risks are high, but the potential rewards could be tremendous.
