Early investors in Canadian biotech stock BELLUS Health (TSX:BLU) could be ecstatic right now after a fine 75.5% rally in BLU stock year to date. The bullish run was ensued after global pharmaceuticals giant GSK offered to acquire all BELLUS stock at US$14.75, or a 103% premium to BLU stock’s previous market price. The transaction received a 99.99% vote by BLU shareholders on June 16, 2023.
A promising clinical-stage Canadian biotech stock has been snatched from the public market. BELLUS Health is developing a potential best-in-class refractory chronic cough therapy, camlipixant, that has reached the final (phase three) testing stage. BLU stock investors could realize up to 847% in returns over a five-year holding period. BELLUS stock has finally handsomely rewarded its faithful investors, despite its struggle to recover from a 2020 drop. Buyouts similar to the BELLUS-GSK deal usually happen when a target company is developing a healthcare solution with significant potential to change lives.
That said, we still have several Canadian small-cap biotech stocks whose research teams are working tirelessly to change the face of healthcare. Two Canada-based biotech stocks come to mind. Let’s have a look.
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AbCellera Biologics
AbCellera Biologics (NASDAQ:ABCL) is a biotech development company that’s using artificial intelligence (AI) to discover antibodies that may be used to treat or cure several health conditions. The Vancouver-based Canadian biotech firm has extensively partnered with emerging biotech firms and well-established pharmaceutical companies. It leverages its proprietary data science-optimized platform to help partners develop medicines faster than ever before.
Banking on a strong balance sheet, the company has committed $401 million to a $701 million co-investment partnership with the government of Canada and British Columbia to strengthen drug development capabilities and help change the face of Canadian healthcare.
ABCL stock trades down 88% off from its highs recorded at its initial public offering (IPO) in late 2020. AbCellera Biologics’s revenue generation has gone down in 2023 because the emergency-use authorization from the U.S. Food and Drug Administration (FDA) on a partnered COVID-19 treatment, bebtelovimab, expired in 2022. However, the biotech stock could be getting ripe for bottom fishing.
The company saw a 20% jump in the number of partnered program starts to 101, and it increased its discovery partners by 14% year over year to 41 during the first quarter of 2023. Its revenue opportunity set is growing.
Insiders at AbCellera acquired 167,500 shares in ABCL stock worth more than US$1.1 million during the past three months. They seem confident of the company’s potential to grow revenue and influence how medicines are developed and commercialized in North America.
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Xenon Pharmaceuticals
Xenon Pharmaceuticals (NASDAQ:XENE) is a British Columbia, Canada-based neurology-focused biotech stock. The clinical-stage biopharmaceutical firm is developing an epilepsy drug program, the XEN1101, that has reached the final (phase three) trial stages and could be commercialized soon to change patient lives.
Although several antiseizure medications are available, the company sees a significant unmet medical need in up to 50% of American patients that have difficulty controlling seizures or have severe refractory epilepsy.
The company is well funded with nearly US$690 million in cash, cash equivalence, and marketable securities on March 31, 2023. The assets could fund the company’s activities well in 2026, including the completion of the current phase three epilepsy drug trials.
XENE stock has produced 397% in returns to investors over the past five years. The Canada-based biotech stock has quietly changed some investors’ lives already.
