Biotech Ready for a Breakout

LAS VEGAS, NV / ACCESSWIRE / July 28, 2016 / The Biotechnology sector is still struggling with a personal bear market, after dropping 40% from its high point in July 2015. While the overall market has strengthened and risen quite a bit from its lows, the biotechnology sector, as represented by IBB, an ETF tracking the Nasdaq Biotechnology Index, is still down 24% for the year. While the broader indexes have enjoyed some resurgence, the IBB has not been able to even come close to the 200 DMA level this year, and was 11% below it at the end of June.

One major thing that has held back the sector has been the political rhetoric of an election year around managing drug prices. While the political issue of rising health care costs and aggressive pricing practices will remain prominent throughout the year, as Presidential candidates posture and Congress conducts more hearings, last month it seemed that the other concerns were dissipating.

That was before the Brexit gripped the market during June. Biotechnology along with the broader market, pulled back on concerns of a British Exit. The key difference between the biotech and the broader market pullback was that the IBB returned back exactly to its yearly low of 240, a level touched in February 2016, while all the key indexes representing the broader market stabilized much higher than their yearly lows. Interestingly, the IBB index bounced back with the broader market and by the close of day on July 1, had returned to its pre-Brexit level.

We believe that conditions which existed prior to Brexit, and made us look forward towards a stronger performance from the Biotech sector, continue to exist and should benefit the biotechs going forward.

Here’s a few biotechs to consider riding the impending resurgence with:

Endonovo Therapeutics, Inc. (ENDV), a developer of bioelectronic devices and medicines, announced recently that it had entered into a binding letter of intent to acquire fellow bioelectronics/electroceuticals developer Rio Grande Neurosciences, Inc. for an aggregate purchase price of $21.5 million. ENDV has already paid Rio Grande Neurosciences $500,000 towards the purchase price through the issuance of a note. The LOI is binding and only subject to the execution of a definitive purchase agreement and shareholder approvals.

The acquisition firmly establishes ENDV as a leader in neuromodulation and bioelectronic medicine, as the transaction brings an FDA-cleared electroceutical device for treating post-operative pain and edema and a pending FDA 510(k) multi-coil repetitive Transcranial Magnetic Stimulation (rTMS) device for treating resistant major depressive disorder.

Furthermore, the transaction adds to ENDV’s overall mission to reduce inflammation in vital organs. Rio Grande’s FDA-Cleared Electroceutical is entering clinical trials for multiple neuroinflammatory and central nervous system disorders and conditions, such as Traumatic Brain Injury (TBI) for which there are currently no effective treatments, acute concussion, post-concussion syndrome, and multiple sclerosis.

With this announced acquisition flying under the radar, investors are excited to get involved with ENDV and it’s easy to see why.

Recently, the company received a price target of $1.15 from See Thru Equity research. With the company currently priced at 21 cents a share, reaching the target price would represent a 448% price gain.

Eleven Biotherapeutics, Inc. (EBIO) announced Friday that an investigational new drug application for diabetic macular edema drug EBI031 has become effective. As a result of this milestone, Eleven is entitled to receive a $22.5 million payment from F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc. (Roche) pursuant to the terms of its license agreement with Roche.

Anthera Pharmaceuticals, Inc. (ANTH) was assigned an average rating of “Buy” from the seven research firms that are currently covering the stock.

Anavex Life Sciences, Corp. (AVXL) is a clinical stage biopharmaceutical company which is focusing on the development of drugs/therapies for the treatment of neurodegenerative and neuro-developmental diseases. The company just presented data from its Phase 2a study of its lead candidate, ANAVEX 2-73, in Alzheimer’s patients at the Alzheimer’s Association International Conference® (AAIC) 2016. Overall, the results show what appears to be a converging and consistent response for all quantitative endpoints through 31 weeks.

Regulus Therapeutics, Inc. (RGLS) suffered a setback with the company receiving a verbal notice from the FDA placing its IND for experimental HCV treatment, RG101, on clinical hold. The clinical hold was placed after the company reported a second serious adverse event (SAE) of jaundice in an early stage study. The news led to a 49.3% decline in the company’s stock price. However, the shares seem to be oversold as the stock has began to make a strong comeback.

XOMA Corporation (XOMA) a leader in the discovery and development of therapeutic antibodies, recently announced it has initiated its Phase 2 proof of concept study for XOMA 213. XOMA 213 (formerly referred to as LFA102) is a monoclonal antibody that neutralizes prolactin induced signaling. Prolactin is a protein that in normal postpartum females enables the production of milk. In some cases, including prolactinomas, which are benign tumors of the pituitary gland in both men and women, excess secretion can lead to various clinically significant abnormal signs and symptoms.

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SOURCE: ACR Communication, LLC

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