The new year always brings a whole new outlook on life. In a sense, it’s a way to start over because it seems like you’re starting out the year with a blank slate. And there’s a lot more anticipation and optimism for what will come — gearing up for a year that’ll be better than the last.
In 2017, the biotech sector had a pretty impressive year. It was a lot better than the previous year (2016). The Nasdaq Biotechnology Index experienced a 19% gain in 2017 — a much-needed gain after 2016’s 19.2% decline in the industry.
In 2016, there were a lot of uncertainties about where biotech was headed and about what type of legislation would come to fruition with a new U.S. president. Throughout 2017, it became obvious that the new president didn’t have biotech at the top of his agenda and that investors were less hesitant about the sector.
A primary factor for 2017’s revival for biotech was the amount of successful clinical breakthroughs throughout the year — in addition to new product launches from biotech and pharmaceutical companies.
And these successes will transfer into 2018.
Ben Yeoh, a senior portfolio manager at RBC Global Asset Management had the following to say about 2018 outlook for biotech and pharma:
R&D [(research and development)] successes and failures are probably going to be the biggest driver of sentiment [in 2018], all other things being equal. The immuno-oncology space continues to be a barometer – there will be a lot of attention there.
There are firms that are teetering on the edge of approval by the Food and Drug Administration (FDA), which has investors feeling optimistic about these approvals — especially when the firm is involved in the gene therapy space.
In 2017, U.S. drug approvals hit a 21-year high with 46 novel medicines being green-lit. And a lot of those medicines were new products coming from younger biotech firms…
3 of the Most Exciting Biotech Innovations of 2018
Immuno-oncology was a big part of 2017 and it looks like that’ll hold true for 2018, as well, with the FDA’s approval of CAR-T (chimeric antigen receptor T cell) therapies. These therapies target cancer cells, and they could be a major breakthrough for cancer treatment — potentially having more success than the traditional ways of treatment like surgery, chemotherapy, and radiation therapy.
And smaller biotech companies are seeing successes because of their products in this subsector, too. For example: In the beginning of 2017, Oncolytics Biotech (OTC: ONCYF) saw a 179% increase in its share price because of the advancements in its new trial of immuno-oncology candidates.
CAR-T cell therapies have so far been limited to small clinical trials. But recently, these therapies have caught the attention of both the public and researchers because of the benefits that they could have for patients who are experiencing negative responses from traditional cancer treatments.
And while, technically, this breakthrough happened during 2017, I believe that CAR-T cell therapies will begin taking off in 2018.
Another exciting innovation on the biotech horizon is a lead drug coming from Acadia Pharmaceuticals Inc. Its lead drug, Nuplazid, was approved for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis.
There’s a stronger focus on drugs to treat diseases and symptoms that have been ignored. And treatments are emerging that are targeting a demographic that was otherwise ignored.
Sage Therapeutics (NASDAQ: SAGE) has become the first company to market a drug for postpartum depression, called brexanolone. Postpartum depression afflicts between 10% and 20% of women who give birth in the U.S. And clinical trials for the drug indicate that it’s both fast acting and long lasting. This is a huge feat, especially for such a serious condition that’s often ignored.
Postpartum depression has the risk of developing into major depression later in life. It affects 1 in 8 women during the first months after childbirth. But this drug has the potential to ease that condition and prevent major depression later.
Alnylam Pharmaceuticals (NASDAQ: ALNY) is the third company that will have a good year in 2018 with the development of its technology platform RNA interference. This platform allows for certain kinds of gene expressions to be “silenced” in order to potentially treat a variety of genetic diseases. This platform is already been considered one of science’s most promising and rapidly advancing frontiers in biology and drug development today.
This could very well be another bright year for biotech. Investors are certainly feeling the optimism brought on by the new year!
Until next time,
Jennifer Clark
Pro Trader Today