WINDSOR,ON / ACCESSWIRE / April 27, 2016 / The Wealthy Biotech Trader (or "WBT"), an investment newsletter focused on showing everyday investors new opportunities in rapidly growing, little-known biotech, pharmaceutical and medical device stocks would like to highlight four biotech stocks trading at dirt cheap prices yet holding immense growth potential.
Companies included: Endonovo Therapeutics (OTCQB: ENDV); Celldex Therapeutics (NASDAQ: CLDX); Oncothyreon (NASDAQ: ONTY); Arbutus Biopharma (NASDAQ: ABUS).
Biotechnology stocks have enjoyed a pretty impressive run over the past couple of years but this year seems to have started off on a different note. So far the Nasdaq Biotech index has fallen by 17.5 percent on a year-to-date basis triggered by a massive selloff by a number of investors. What makes this so surprising is most of the underlying fundamentals in the sector haven't changed much and these investors have only been reacting to what they deem to be signs pointing to a potential reversal in the high flying sector.
Currently some of the key issues driving the negative sentiments in the sector include the slowdown in China's economy, possible rate hikes by the Fed as well as drug pricing issues highlighted by presidential candidate Hillary Clinton. However, due to such concerns, which we believe seem to be a little overblown, a number of small biotechs such as Endonovo Therapeutics (OTCQB: ENDV) are trading at extremely cheap prices.
Endonovo Therapeutics (OTCQB: ENDV) is a biotechnology company developing bioelectronic devices and therapies for regenerative medicine. The company has developed a non-invasive immuno-regulatory device called Immunotronics™, which uses electromagnetic pulses to deliver electrical stimulation via inductive coupling to the nervous system, tissues and organs to reduce inflammation and cell death. Endonovo is also using bioelectronics to create next generation cell therapies using its Cytotronics™ platform. The company is utilizing this platform to create an off-the-shelf cell therapy for the treatment of Graft-Versus-Host Disease (GvHD).
THE MISMATCH IN CURRENT VALUATION
Endonovo Therapeutics' (OTCQB: ENDV) market cap currently stands at about $50 million and we believe there still remains lots of room for growth. For those not familiar with GvHD, it is a rare condition occurring where immune cells in donor bone marrow or cord blood transplants attack the recipient of the transplant causing a failure of the graft and is a significant cause of morbidity and mortality in allogeneic transplants. The total addressable market for this revolutionary treatment alone is expected to peak at approximately $544 million by 2023 according to research and consulting firm GlobalData, representing a robust CAGR of 12.8 percent from 2013 levels.
The company is working on filing for orphan drug designation for the treatment of GvHD, which could see it come to market much faster than other treatment options. On the other hand, the bioelectronic device is targeted towards treating inflammatory conditions in vital organs with an initial concentration on inflammation in the liver, another huge potential market in the range of $25 billion as of last year.
Furthermore, management has been strengthening its financial position by repurchasing more than $150,000 in convertible notes to prevent shareholder dilution and is also in the process of having returned to the company 1.89 million unpaid shares from a rescinded equity purchase agreement with Kodiak Capital—this could be a major catalyst for the shares if this stock is pulled out of the system for numerous reasons.
MORE CHEAPLY VALUED BIOTECHS
Celldex Therapeutics (NASDAQ: CLDX) is developing targeted therapeutics to address devastating diseases for which available treatments are inadequate. While the company has an impressive pipeline which includes promising brain cancer therapies, the stock has taken a beating and is down almost 75 percent on an YTD basis. Just earlier this week at the American Association for Cancer Research (AACR) annual meeting, Celldex announced favourable safety profile and immune response data from Phase 1/2 Study of its Varlilumab and Nivolumab in patients with solid tumours and ovarian cancer.
According to Tibor Keler, Ph.D., Executive Vice President and Chief Scientific Officer of Celldex Therapeutics, "The combination of varlilumab and nivolumab demonstrated acceptable tolerability across all dose levels of varlilumab, showing that immune stimulation through CD27 was safely combined with PD-1 blockade." Based on these strong preclinical data Celldex is confident about the outcome of the phase II study which has already begun enrolling patients for six different indications.
These indications include colorectal cancer and ovarian cancer whose combined treatment market is expected to reach over $12 billion by 2020. With Celldex going after such a lucrative market and showing such promising data, we believe that this would be a great time to consider owning the stock.
Oncothyreon (NASDAQ: ONTY) is a clinical-stage biopharmaceutical company which engages in the research and development of therapeutic products for the treatment of cancer. Its most advanced product candidate is ONT-380, an orally active and selective small molecule HER2 inhibitor developed using the company's protocell technology for treatment of HER2 positive breast cancer patients.
Basically, HER2 is a growth factor receptor that is over-expressed in multiple cancers, including breast, ovarian, and stomach cancer which mediates cell growth, differentiation and survival. Tumours that overexpress HER2 are more aggressive and historically have been associated with poorer overall survival compared with HER2 negative cancers. To better put the massive opportunity for Oncothyreon investors in perspective, ONT-380 is the only HER2-selective small molecule in clinical development.
So far Oncothyreon's stock has dipped 47 percent since the beginning of the year with the current month seeing the stock becoming range bound at $1.16. Analysts at Jefferies recently reaffirmed their buy rating on the stock with an estimated target share price of $4 which represents a potential upside of approximately 240 percent.
Arbutus Biopharma (NASDAQ: ABUS) is a biopharmaceutical company which is focused on discovering, developing and commercializing a portfolio of drug candidates for chronic hepatitis B (HBV) infection. The company's portfolio of assets includes three distinct pipelines of products in development: one focused HBV Assets, one on Non-HBV Assets and one on Partnered Programs. This has been one of the hardest hit biotechs in the recent sell off as it has seen its share price nose dived by 73 percent in spite its lead product ARB-1467 an RNAi drug for treatment of HBV having so much potential.
RNAi drugs allow for a completely novel approach to treating diseases and ARB-1467 is designed to eliminate HBsAg expression in patients chronically infected with HBV. Getting rid of this expression is thought to be a key prerequisite to enable a patient's immune system raise an adequate immune response against the virus. According to business intelligence provider GBI Research, the global HBV therapeutics market will be worth $3.5 billion by 2021 which bodes well for Arbutus.
Also, it is important to note that the company has already developed a follow-on RNAi HBV candidate, ARB-1740 which has proven more potent than ARB-1467 in preclinical studies which means lower clinical dosses. The stock has already started to rebound and is up 15 percent over the past month which indicates that investors looking to get on board shouldn't wait too long.
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