Here's Why I'm Watching These Six Biotech Stocks

For investors, the end of ASCO in no way means the end of intriguing opportunities in biotech. Starting today, the 6^th Annual Meeting of the American Society of Gene Therapy begins in Washington, DC, and with it begins more potential trading opportunities. This meeting, although not as popular as ASCO, is sexier than ASCO by way of its content. It brings together scientists and companies to discuss the latest cutting-edge research in gene therapy for a variety of diseases. The presentations at this meeting are pushing the envelope in applying gene therapy to the treatment of disease. 

I not only like this meeting from a physician standpoint, I also like it from a short-term investor standpoint. Companies presenting at this meeting have come in under the ASCO radar screen and will not get noticed until the data is presented over the next few days. Most of the presentations involve preclinical data on gene therapy and some clinical studies. However, given the current post-ASCO euphoria over biotechs, I suspect some of these companies will move over the next two days even if the preclinical data exhibits potential. These are the companies with a presence at this meeting.

Sangamo BioSciences (SGMO | Quote | Chart | News | PowerRating) has a major presence at this meeting with eleven presentations discussing the company’s proprietary gene transcription factors called zinc finger DNA-binding proteins or ZFPs. Now this is a mouthful. However, it is very interesting stuff with solid science behind it.  Basically, ZFPs are proteins that allow scientists to turn genes on or off. The hope is to use these highly specific gene modulators to turn designated genes on or off with the intent to treat disease on a genetic level. For instance, Sangamo BioSciences will present preclinical data on its ZFP technology that turns on one of the genes (VEGF A) necessary for the growth of new blood vessels, a process called angiogenesis. We all heard about anti-angiogenesis drugs to treat cancer (Genentech’s Avastin) during ASCO. However, in treatment approaches to other diseases doctors often want to induce the formation of new blood vessels. 

Potentially, this ZFP-induced upregulation of the VEGF A gene and the formation of new blood vessels could lead to the treatment of atherosclerotic disease in arteries of the legs or heart. Imagine using gene therapy to induce new blood vessel formation in damaged heart tissue after a heart attack. I have always liked this company ever since its birth. It doesn’t have any revenue-generating products or drugs in clinical trials. However, it does possess exciting new gene-regulation technology grounded in proven science and all backed by Massachusetts Institute of Technology brains. 

Other companies represented at this meeting of gene therapy minds include Targeted Genetics (TGEN | Quote | Chart | News | PowerRating), Avigen (AVGN | Quote | Chart | News | PowerRating), Ariad Pharmaceuticals (ARIA | Quote | Chart | News | PowerRating), Introgen Therapeutics (INGN | Quote | Chart | News | PowerRating), and last but not least GenVec (GNVC | Quote | Chart | News | PowerRating). All of these companies are developing novel ways to utilize gene therapy for the treatment of human diseases. 

Targeted Genetics specializes in technology that inserts genes into targeted cells to potentially treat disease. Once a desired gene is inserted into a diseased cell, the gene can be activated to produce a protein product lacking in that particular diseased cell. What is interesting about this company is that one of its presentations discusses the preclinical evaluation of its novel vaccine for HIV infection. This presentation alone could attract some attention just because it is in the HIV vaccine space. Avigen also is developing a technology to facilitate the entry of desired genes into targeted cells. This company uses an adeno-associated virus to carry specific genes into cells. Avigen is working on gene therapy to treat Hemophilia A/B (genetic blood-clotting disorder) and Parkinson’s disease.

Introgen Therapeutics recently made a splash at ASCO with its new Advexin gene therapy trials. The company revealed some very interesting clinical data regarding its p53 suppressor gene delivery system (INGN 241) to treat advanced breast and esophageal cancer. At this meeting, Introgen’s presence may continue to fuel investor enthusiasm. GenVec also presented some encouraging clinical data at the recent ASCO meeting that basically got lost in the euphoria generated by the heavyweights Genentech and ImClone. However, at this gene therapy meeting GenVec is presenting a paper that may attract some investor attention. The company will discuss preclinical data on its novel treatment for the disease anthrax. We all know about anthrax. GenVec’s preclinical data on its new treatment approach for this disease has a lot of promise and should make some news.

Good Luck,
Paul Ruggieri MD, FACS