Why Small Molecule Oncology Drug Stocks Look Promising
Advanced stock trading software has helped many get started in stock trading. However, it still can be a challenge to find out the next big investment opportunity.
Why the Cancer Drug Arena Is Hot?
The oncology space is really heating up. And, cell-based therapies are grabbing the headlines. Therapies based on bi-specific antibodies are also gaining attention. However, Motley Fool’s Cory Renauer says that the big biopharma companies have a greater interest in therapies based on simpler solutions, specifically small molecule drugs as indeed four of 2018’s top 10 cancer therapies were. In the race to develop revolutionary cancer therapies, we’ve been seeing large pharmaceutical companies acquiring smaller biotechs that are carrying out the bulk of the research. Renauer estimates $32 billion were spent by these Big Pharma companies in acquiring the smaller ones.
Key Acquisitions for Big Pharma Companies to Cash In
Here, the analyst mentions six such acquisitions – GlaxoSmithKline ($GSK) acquiring Tesaro for $5.1 billion, Seattle Genetics ($SGEN) acquiring Cascadian Therapeutics for $614 million, Pfizer ($PFE) getting hold of Array Biopharma ($ARRY) for $11.4 billion, Eli Lilly ($LLY) buying Loxo Oncology for $8 billion, Roche’s (SWX: ROG) acquisition of Ignyta for $1.7 billion and Takeda ($TAK) buying Ariad Pharmaceuticals for $5.2 billion.
Small Molecule Drugs to Shrink Tumors
All these acquired biopharma companies are developing small molecule drugs to shrink the tumors by stifling the proteins that foster their growth. Renauer explains that isn’t exactly easy since a molecule is too small to be made to attach to a pocket of a folded protein to stop its activity. With tumor genome sequencing really growing though, there is no lack of potential targets. But what’s needed is a pocket to bind the drug to. Computational models, however, can help investigators to specifically aim for pockets existing for just a brief moment as the target protein changes, and make them inactive by freezing them.
Exelixis and Mirati Therapeutics
Exelixis ($EXEL) leads the way here. It has a small-molecule drug in its arsenal for treating liver and kidney cancer – Cabometyx. Unfortunately, this also has the capability to inhibit 13 various tyrosine kinases. These play a big role in the functioning of healthy cells. So, Renauer believes the company does not appear to be anywhere near an attractive buyout offer.
But Mirati Therapeutics ($MRTX) certainly is. Its cancer therapies are more targeted. The winning factor is that Mirati’s therapies have the capability of inhibiting the proteins that are overactive, but without affecting the rest of the proteins. It has a recent market cap of $3.7 billion, keeping it in line for a midsize buyout. Its lead drug is MRTX849, actually discovered by Array Biopharma, which is also responsible for many other drugs in this genre.
At the beginning of the article, we mentioned that Array was acquired by Pfizer for $11.4 billion. Now you see the reasoning behind it.
The above-mentioned points could give you some idea of this promising field of oncology. Online trading brokerages such as TradeZero can give you all the resources you need to trade well. All you need to do is give us a call at 1 954-944-3885, or email email@example.com.
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