Biotech and pharmaceutical companies have benefitted from ASCO conferences, where the annual meeting takes place at the conclusion of the week.
So far, biotech has been an underperformer this year, gaining ground in February and March, but it has struggled to maintain those gains. For the second year in a row, the American Society of Clinical Oncology meeting will be held virtually, from June 4 to June 8.
“ASCO was by far the largest medical conference of the year, and everyone looked forward to it. And you’d be giving company presentations in front of 30,000 oncologists,” he explained. “Hundreds of Wall Streeters would be present. You could get a good sense of what was going on at the meeting. Because it is virtual, it lacks some of its allure.”
Meacham, on the other hand, believes ASCO could still be positive. “You have brand-new data, which could lead to approvals and some very good products,” he said.
Despite the industry’s poor performance, Meacham remains optimistic about biotech. He is particularly fond of mid-cap biotech.
“We’ve been pretty upbeat about the group. Recognizing that drug pricing has been a bit of a cloud in recent years, and 2021 is no exception,” said Meacham. “However, when you look at the pipeline, the midcap biotech pipeline appears to be fantastic.”
Big Pharma has a pipeline, but it is not as robust. “The majority of the time, it’s singles and doubles. Midcap biotech, on the other hand, has some home run potential, but at a higher risk. That is what drives the industry – innovation and new therapies – and it is why we remain optimistic.”
The IBB iShares NASDAQ Biotech ETF increased by 0.4 percent last week, but it is up only 0.3 percent year to date. For the month of May, the widely followed IBB fell 1.7 percent.
Meacham identified three companies that he believes will be well received at the ASCO meeting. All of them have a buy rating from Bank of America. Bristol-Myers Squibb is one of these companies.
“Bristol is most likely one of the winners,” he predicted. The company’s anti-LAG-3 antibody relatlimab melanoma treatment has been in development, and data from a large phase 3 trial will be available. He stated that the product was used in conjunction with Opdivo and that it may have a better safety profile than the current treatment of Opdivo combined with Yervoy. He does expect Opdivo and Yervoy to maintain their market share in the future.
Amgen, a major biotech company, is giving a presentation on Lumakras, a lung cancer drug that was approved by the Food and Drug Administration on Friday. The drug was approved to treat lung cancer patients with the KRAS genetic mutation. The approval came earlier than expected, sending Amgen stock up more than 1.1 percent on Friday.
He stated that it could be combined with other therapies, such as Opdivo. “That two-drug combination could be really powerful,” he says.
Seagen, a biotech company, will present its Padcev treatment for bladder and kidney cancer, which was launched last year. “This is an update of previously collected data,” he explained. According to the data, patients live longer lives.
The trial is a small phase 2, but there is a larger phase 3 trial combining the therapy with Merck’s Keytruda.
Eli Lilly, Merck, Regeneron, Hookipa, AbbVie, and Gilead are among the other companies whose data will be presented at ASCO.