Pharmaceutical Investing

What happened in Q1 2018 for the pharma industry? Here’s a look back at some of the quarter’s biggest news and trends, plus what could be next.

The first quarter for the pharmaceutical industry hasn’t been without memorable events, setting the tone for the next quarter and beyond for companies and investors in the space.

Investors in the pharmaceutical industry know the profits can outweigh the risks with the right companies or ETFs. For any company highly regulated, in most cases by the US Food and Drug Administration (FDA)–the waiting game for high profits can persist over years, although it can be worth the wait.

Over the first quarter FDA approvals, clinical trials and IPOs have played a big role in volatile share prices.

As the first quarter comes to a close and companies continue gathering financial information to release to investors, the Investing News Network takes a look back at what went on in the first quarter and what to look for in the second.

Pharma Q1 2018 update: FDA approvals

While FDA approvals aren’t surprising, companies awarded approvals generally see profits within the same year for that drug.

The pharmaceutical industry has seen six novel drug approvals in the first quarter, including Lutathera from Novartis (NYSE:NVS), Biktarvy from Gilead (NASDAQ:GILD), Symdekotm from Vertex (NASDAQ:VRTX), and Erleada from Johnson & Johnson’s (NYSE:JNJ) Janssen.

Not all the approvals were from the usual big pharma companies, though. Later in the quarter Theratechnologies (TSX:TH) and its partner TaiMed received an FDA approval for Trogarzo and the Mumbai-based Sun Pharma (NSE:SUNPHARMA) received an FDA approval for Ilumya.

Companies will be expecting more approvals in the second quarter, so interested investors should follow along with INN for upcoming news.

Pharma Q1 2018 update: Clinical trials in the works

Clinical trials give direction for investors in the pharmaceutical industry and tell where profits may reach. Many companies are searching for cures for the biggest diseases including cancer.

Specific types of cancer, such as lung cancer—lung cancer is responsible for the highest death cancer toll—have niche indications such as non-small cell lung cancer and a high unmet need for treatments. If successful with creating treatments, these niche areas can give companies and investors a good return on sales.

This quarter has seen a range of successful and failed trials. It’s important for investors know both sides of the coin to understand how profitable and risky the pharmaceutical investing business is.

Amgen’s (NASDAQ:AMGN) Liberty Phase 3b study met primary endpoints in the beginning of the year for a new migraine drug, Aimovig. Spectrum Pharmaceuticals’ (NASDAQ:SPPI) Phase 3 study for Rolontis for early-stage breast cancer and Madrigal Pharmaceuticals’ (NASDAQ:MDGL) MGL-3196 for patients with heterozygous familial hypercholesterolemia both met its primary endpoints.

On the other hand, Menlo Therapeutics (NASDAQ:MNLO) Phase 2 trial for serlopitant and Dermira’s Phase 3 trial for Clareos (1 and 2) did not meet its primary endpoints.

Whether it’s positive or negative news, share prices reflected investor interest and concern, by increasing or decreasing depending on the news.

Pharma Q1 2018 update: Expanding with IPOs

Investors who thought 2017 was full of IPOs may have been met with surprise in the first quarter with the abundance of IPOs and public offerings.

According to BioPharma Catalyst, pharmaceutical companies who have released IPOs on the NASDAQ include: Menlo Therapeutics, Eyenovia (NASDAQ:EYEN), resTORbio (NASDAQ:TORC), Sol-Gel Technologies (NASDAQ:SLGL), BioFrontera (NASDAQ:BFRA), BioXcel Therapeutics (NASDAQ:BTAI), and Unum Therapeutics (NASDAQ:UMRX).

These companies offer a variety of therapeutic options from oncology to antibody-coupled T-cell receptor technology. Although none of the companies with IPO offerings in Q1 have had their share prices increase, proactive investors should watch out for these companies in Q2 with updates on their respective pipelines.

Investor takeaway

Similar to the biotech industry, many pharmaceutical companies have lighter earnings in the first quarter due to medicare and medicaid payments. Investors should focus on clinical trial results coming out in the next quarter and the rest of the year, following FDA approvals.

Looking forward to the next quarter, IPOs include Alzheon, which officially launched on April 23 and will be a newcomer to the investing industry. Mereo BioPharma (LSX:MPH) and Taiwan Liposome (4152:TT) will also be newcomers to the NASDAQ on April 23 and 26, respectively.

Whether involved in pharmaceutical investing or not, watch for more IPOs, clinical trial updates, FDA approvals and more in the coming quarter.

Don’t forget to follow us @INN_LifeScience for real-time news updates!

Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.


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