This commentary originally appeared on Real Money Pro at 11:30 on Aug. 25, 2017. Click here to learn about this dynamic market information service for active traders.
Today, we'll continue our discussion of several small biotech/biopharma names that look attractive heading into key milestone dates in the months ahead. But before we get to some new ideas, it's been a good week for two firms we have recently written about.
Adamas Pharmaceuticals (ADMS) , a name we gave a "thumbs up" to six weeks ago, is up around 45% in Friday morning trading. Just after the bell on Thursday, the FDA gave the green light to the company's primary drug candidate ADS -5102. The compound became the first approved to treat Levodopa-induced Dyskinesia found in Parkinson's patients.
This condition is found in the vast majority of the Parkinson's population and should find a potential market of 150,000 to 200,000 individuals just in the U.S. We liked Adamas as it approached this critical PDUFA (Prescription Drug User Fee Act) date.
On Wednesday, we highlighted the attractiveness of Flexion Therapeutics (FLXN) in front of its PDUFA date of Oct. 6 for its primary drug candidate Zilretta. Flexion got a boost in Thursday trading when Northland Capital initiated the name as an "Outperform." We obviously still like the prospects for Flexion into its key decision date.
Now on to additional small biotech/biopharmas that look favorable ahead of milestone dates.
A compound called NT-0201 from Neos Therapeutics (NEOS) is up for PDUFA review on Sept. 15. Similar to the other two recently approved drugs in the company's arsenal it is aimed at Attention Deficit Hyperactivity Disorder, or ADHD, which has grown to be an almost $10 billion market in the U.S.
Although NT-0201 probably will only see eventual peak sales of $25 million to $50 million, it can be serviced by the same sales force marketing and distributing the company's two other drugs aimed at the same space. This should boost sales and margins quite efficiently.
With a market cap of around $200 million, Texas-based Neos does not have to garner much of a share in this huge market to be attractive from an investment perspective. The company could also make for an attractive bite-sized acquisition for a larger suitor that wants to expand its footprint in this growing market.
A key date circled on my calendar is Nov. 10. That is when the five-year-old saga Dynavax Technologies (DVAX) has endured to push its hepatitis B vaccine Heplisav-B over the finish line will finally come to an end. The outcome is far from uncertain now after the biologic's Ad Comm Panel voted overwhelmingly to recommend the vaccine for approval.
The extra time between the Ad Comm Panel vote on July 28 to November will allow Dynavax to design the post-marketing study that should formally get the rubber stamp in the second week of November.
Heplisav-B should have at least $500 million peak sales potential of at least $500 million just in the U.S. And I suspect the company is in talks with various vaccine players, such as Merck (MRK) , to license global rights and possibly become a marketing and distribution partner in the U.S.
The company also has a very promising oncology asset -- "SD-101" -- moving to mid-stage development as well as a promising mid-stage asthma compound in development with partner AstraZeneca (AZN) . Even with the stock's recent rally, the shares still look significantly undervalued from a "sum-of-the-parts" valuation.
