Thanks to renewed interest in biotech stocks, the index rose sharply last week. Gilead Sciences (NASDAQ: GILD), an underdog for over a year and Valeant Pharmaceuticals (NYSE: VRX) are notable gainers in the last week. The rally may lose steam, though, and will depend on what the U.S. government does with restructuring and reforming the health-care program.
Biotech stocks depend on the government cutting red tape and easing regulations for drug approvals. If the government does not enforce a tough pricing law for drugs, that would help the industry. Within the sector, Regeneron Pharmaceuticals (NASDAQ: REGN) is worth looking at more closely. On June 21, its competitor, Novartis (NYSE: NVS), released positive data for its RTH258 clinical study. Regeneron’s Dupixent, which treats atopic dermatitis, is a likely big revenue generator for the company. The disadvantage of the drug is the need for its administration through injection. Novartis’ product could have an edge here.
Regeneron has other key products. Praluent, which treats diabetics, holds promise. The clinical study, in Phase 3b/4 demonstrated cholesterol levels declining when 75 mg is taken every two weeks.
Investors should not treat every biotech stock rebound equally. Regeneron has multiple blockbuster products that will accelerate the stock price as revenue grows in the years ahead.
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