Any investor in this type of stock needs to stay in the know about what catalysts are coming and why they're important for the company's future.
With that in mind, here's a list of three all-or-nothing biotech stocks facing upcoming catalysts over the next year that I plan to watch with great interest.
One drug, multiple indications
First up is Intra-Cellular Therapies (NASDAQ:ITCI), a red-hot biopharma that managed to charm the markets in 2015. This company's future is completely tied to the success of ITI-007, a compound that holds great promise in treating a range of diseases of the central nervous system.
Intra-Cellular is currently running three phase 3 trials to test ITI-007's ability to treat bipolar depression, behavioral disturbances associated with dementia, and schizophrenia. It also has trials in earlier stages testing the drug in a range of other indications.
The company is the furthest along with its testing related to schizophrenia. Last year it released results from its first phase 3 trial, and they looked quite encouraging. Schizophrenia patients who were treated with ITI-007 showed a statistically significant improvement in their Positive and Negative Syndrome Scale (PANSS) score -- meaning their symptoms became less severe -- compared to those who took a placebo. The drug also demonstrated a safety level similar to that of a placebo.
Intra-Cellular is currently running a second phase 3 trial on schizophrenia, and top-line data is expected later this year. If that looks good, then FDA submission should follow soon after.
There's no doubt that it's an exciting time to be an investor in Intra-Cellular's stock, and with another round of data due out soon, this company deserves a close watch.
Catching the attention of big pharma
I'm a firm believer that the majority of biotech stocks that trade below $5 per share should be written off as uninvestable, but I must admit that I'm intrigued by Geron (NASDAQ:GERN).
Geron's lead product candidate, imetelstat, is currently in late-stage trials as a treatment for two rare but serious blood cancers: myelofibrosis and myelodysplastic syndromes. I'm hopeful for this drug's potential because in early clinical trials, imetelstat generated both partial and complete responses in patients who had myelofibrosis, which no other drug had ever accomplished.
Geron's early clinical success caught the attention of Janssen, the biotech arm of Johnson & Johnson, and the two companies are now collaboration partners. Janssen was so interested in imetelstat that it forked over $35 million in up-front capital and has also pledged up to $900 million in milestone payments if imetelstat becomes a blockbuster hit.
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