Here’s why biotech stocks Adaptimmune Therapeutics, Agenus, and Ocugen all crashed in November
Biotech stocks performed unusually poorly in November. Over the past 10 years, the barometer SPDR S&P Biotech listed fund (NYSEMKT: XBI) has lost ground at the same time during that particular month, and even then this ETF was only down 3.66% for the entire month. Last month was a whole different story, however. The S&P Biotech SPDR ETF lost almost 7% of its value in November 2021, thanks to a gust of headwinds.
Biotech stocks were beaten last month in response to a surge in core inflation in the United States, the emergence of the omicron coronavirus variant on the global stage, the growing appeal of crypto -currencies for risk-tolerant investors, harvesting tax losses and the Food and Drug Administration’s (FDA) Strategic Decision to Prioritize Regulatory Review of COVID-19 Products Over Non-COVID Therapies. This chaotic environment led investors to hit the sell button on dozens of promising biotech stocks in November.
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For example, cancer immunotherapy companies Adaptimmune Therapeutics (NASDAQ: ADAP) and Agenus (NASDAQ: AGEN) both lost about 18% of their value last month, while the COVID-19 vaccine player Ocugen (NASDAQ: OCGN) saw its shares fall 46% in November, according to data from S&P Global Market Intelligence.
Adaptimmune shares were sucked into this black hole of negative investor sentiment in November despite the news of several positive developments in recent months. Specifically, Biotech has announced that its lead product candidate, afami-cel, will meet the primary endpoint of its ongoing pivotal synovial sarcoma trial, paving the way for regulatory filing with the FDA. next year.
Adaptimmune also recently announced plans to advance its cell therapy platform in mid-term trials for cancer of the esophagus, esophagogastric junction and ovary. These three indications have the potential for successful sales.
Finally, the biotech has concluded collaboration agreements with Astellas, GlaxoSmithKline, and rock, giving it a cash trail until 2024. In short, this promising cancerous stock arguably was unfairly punished by the gloomy market in November.
Agenus and Ocugen, on the other hand, took a step back last month due to recent key setbacks. In October, Agenus was forced to look to its early stage pipeline as a primary driver of value after the FDA asked the company to withdraw a regulatory dossier for the checkpoint inhibitor balstilimab. Ocugen, on the other hand, has been hit with a clinical suspension by the FDA for its COVID-19 vaccine in partnership with Bharat Biotech, Covaxin. While the COVID-19 vaccine landscape appears to be on the verge of a major overhaul with the emergence of the omicron, it is not entirely clear how the commercial potential of Covaxin will be affected in North America. Time will tell us.
Are any of these three biotech stocks worth buying after that November swoon? Adaptimmune stands out here as a garish buy. Biotechnology has several catalysts coming up over the next 12 months, and one of its partners may pull it out soon. Agenus and Ocugen, on the other hand, are likely to require some patience from investors. This is not necessarily a bad thing. But the need for a longer term approach with these two biotechnologies reflects recent events.
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George Budwell has no position in the stocks mentioned. The Motley Fool recommends GlaxoSmithKline. The Motley Fool has a disclosure policy.
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