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Biotechnology stocks are still down for the year, adding more to the discount. Celgene (NASDAQ: CELG) looks like a deep value play as markets continues to ignore its positive long-term prospects. CELG stock trades at a 13 times P/E and seven times forward P/E.
In December, Celgene reported multiple positive clinical results. On Dec. 4, it said its CAR-T JCARH125 showed positive results – an ORR of 82% - for patients with relapsed/refractory multiple myeloma. On Dec. 3, its TRANSCEND CLL-004, which evaluates CAR-T candidate lisocabtagene maraleucel, showed an ORR (overall response rate) of 81%.
On Dec. 2, Celgene and Acceleron (NASDAQ: XLRN) reported results for its luspatercept, a drug treating anema beta thalassemia. A statistically significant proportion of patients experienced an improvement compared to placebo.
Gilead Sciences (NASDAQ: GILD) is the other deep undervalue biotech play investors should watch. The stock traded in the range of $66 - $72 since November. On Dec. 2, Gilead said at #ASH18 that its CAR-T Yescarta, which treats patients with refractory large B-cell lymphoma, showed sustained treatment effect. With ZUMA-3, which is in Phase ½, 69% or 25 patients achieved complete tumor remission.
Your Takeaway
Markets are so afraid of equity stocks that they are ignoring the fundamentally positive news on Celgene and Gilead Sciences. That might prove a turning point for the stock, rewarding those who buy based on value.
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