3 Biotech Stocks That Have More Than Tripled so far This Year

It takes the S&P 500 index on average around seven years to double. But plenty of stocks deliver 100% gains in a much shorter period of time. And some even triple or more. We asked three Motley Fool contributors to pick biotech stocks that have tripled or more so far this year. Here’s what they had to say about…

Cassava Sciences (NASDAQ:SAVA)Ocugen (NASDAQ:OCGN), and BioNTech (NASDAQ:BNTX).

Risk-averse investors should look elsewhere

Prosper Junior Bakiny (Cassava Sciences): Shares of Cassava Sciences have soared by roughly 800% since the beginning of the year — a terrific performance and one which the company owes to Simufilam, an investigational medicine for the treatment of Alzheimer’s disease (AD). Positive data from an open-label study for the company’s leading candidate, coupled with the unexpected approval of Biogen‘s AD drug Aduhelm, helped propel Cassava Sciences stock this year.

The biotech is now moving ahead with this program. In October, it started a phase 3 study for the investigational medicine. The trial will enroll 750 AD patients with mild and moderate cases of the disease, and test the safety and efficacy of Simufilam over 52 weeks. Cassava Sciences is also planning to start another late-stage clinical trial before the end of the year. The company seems to be firing on all cylinders, but I’d still avoid this stock.

For one, Simufilam wouldn’t be the first promising potential AD medicine to fail in a couple of pivotal clinical trials. It could succeed, and the upside for Cassava Sciences would be huge if it does. But as a clinical-stage biotech, the company has no products on the market, and its performance will depend on the perceived success or failure of Simufilam in these upcoming studies. Even if it produces strong results in the lab, unforeseen regulatory setbacks have sunk more than a few promising clinical-stage biotechs.

Furthermore, the AD market could look very different from how it looks today by the time Simufilam earns approval, if it ever does. The launch of Biogen’s Aduhelm has been disappointing so far, but sales of the therapy could speed up. Eli Lilly recently announced it had initiated a rolling submission to the Food and Drug Administration (FDA) for its investigational AD drug, donanemab. The pharma giant expects a regulatory decision as early as the second half of 2022. Cassava Sciences could make headway into this market despite the competition, but an increasingly crowded space could also limit the company’s upside.

In short, after more than doubling this year, Cassava Sciences’ future remains uncertain. Aggressive investors might consider initiating a small position in the stock. But for the risk-averse, it’s better to watch from a safe distance for now.

A meme stock that’s taken investors on a wild ride

David Jagielski (Ocugen): Buying shares of a meme stock that’s popular with retail investors can put your portfolio on a bit of a wild ride. And that’s exactly what’s happened with Ocugen investors in 2021. If you bought the stock at the beginning of the year, you’d have more than quadrupled your money by now. However, Ocugen’s share price has plunged close to 50% below its high three times this year — most recently over the last few weeks.

The company doesn’t yet have a product that it can sell to customers. The stock’s immediate success hinges on the fate of Covaxin, the COVID-19 vaccine it’s co-developing with the Indian company Bharat Biotech. Ocugen only shares in the profits that will come from the vaccine in Canada and the U.S., although neither country has approved the vaccine, even for emergency use.

The good news is that with the FDA recently announcing that mixing and matching booster shots is acceptable, Covaxin will have an opportunity to penetrate the market in the U.S. even if vaccination rates climb higher (currently, they’re at around 60%). Ocugen has filed for…

 

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