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Q3 Corporate Quarterly Updates: Small and Mid-Cap Biotech Stocks to Watch

Updated: Oct 11, 2021

Summary:

  • Almost 25% of the over 550 smid-cap biotech therapeutics companies in our BPIQ.com database get some revenue from their, or their partner’s commercial activities

  • Over the next month, most of these companies will report their Q3 corporate updates.

  • Q3 corporate update dates for commercial smid-cap biopharma companies are included in our BPIQ.com catalyst calendar because they can be catalyst events

  • For a full version of this article, including the commercial smid-caps that moved the most from their Q2 corporate updates, read our full article HERE, after signing up. Learn more here. Plus, as a bonus you will have access to Amp Biotech Research's view on the best investment currently, between the commercial companies BCRX, AUPH, and ESPR here.

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Dates of Q3 biotech company corporate quarterly updates have begun and report-outs will start soon, with the vast majority occurring near the end of October and into the first few weeks of November. This is important because some biotech companies will update their clinical trial read-out dates and all biotech companies will update investors about their cash positions. With respect to profits and product revenue, the vast majority of biopharma stocks with market caps under $5 billion (smid-cap biopharma), which are the focus of our BPIQ.com database, are not profitable. In fact, the vast majority of these companies burn millions of dollars annually, and in many cases 10s of millions of dollars. Furthermore, the vast majority of these companies are pre-commercial (i.e. they derive no revenue from approved products they sell) and many of them have no revenue. However, some of these companies receive revenue either from direct commercial activities, or from partners, who are usually large-cap companies who pay a royalty or profit split to the smid-cap biopharma companies upon sales of a product that was developed using technology from a smid-cap biopharma partner.


With over 550 smid-cap biotech companies in our BPIQ database, we determined that about 125 of these companies derive revenue from commercial products (BPIQ.com paid subscribers can see Forum Table 1 in the forum version of this article). Thus, about 20-25% of smid-cap biotech companies receive some revenue from commercialized therapeutic products that they and/or a partner sell. This revenue is derived from over 190 commercial products (Forum Table 1). Thus, quarterly revenue updates for almost 25% of smid-cap biopharma companies can drive the stock price of these companies.


Our BPIQ.com database includes information cards (called “IQ” cards) for the vast majority of these commercial products of smid-cap biotech companies because, as discussed above, annual sales projections and quarterly actual revenue numbers in some cases, are catalysts for the corresponding stock. You can search for commercial product revenue updates in our catalyst database on bpiq.com by selecting the “Include Approved Drugs” check box in the advanced Catalyst Calendar search area (FIG. 1). Furthermore, our company Pipeline pages on BPIQ.com include links to the IQ cards for most significant commercial products of these smid-cap biopharma companies (See e.g., FIG. 2).


FIG.1 BPIQ.com Advanced Search in Catalyst Calendar (Approved Drug checkbox circled red



FIG. 2 Exemplary smid-cap biotech pipeline section of company page on BPIQ.com.



We analyzed the commercial* smid-cap biotech companies in our BPIQ.com database for their movement when they released their Q2 corporate updates, mostly in early August 2021. When Q2 revenue was reported, the biggest positive mover across the day reporting was Aurinia Pharmaceuticals (AUPH). AUPH moved over 23% during the day they reported quarterly earnings. LUPKYNIS (voclosporin) (the approved asset of Aurinia) is their only asset, which was approved on January 22, 2021 to treat lupus nephritis. A continuation study is also ongoing with topline results expected by the end of 2021. Quarterly sales were then a large factor in the movement of the stock during the day of the report out, especially because the product sales of LUPKYNIS increased from $900,000 to $6.6 million between the first and second quarters (over 600% increase). VYNE had the biggest move in a negative direction (-31.1%) during Q2 reports. On the same day as reporting their quarterly earnings, VYNE Therapeutics also announced the licensing of the BET inhibitor platform by entering into an exclusive license agreement with in4DERM Limited (VYNE Therapeutics Announces Licensing of BET Inhibitor Platform for Immuno-Inflammatory Conditions with In4Derm Limited).


Focusing back on the main point of this article, an example of a strong revenue/commercial launch, driving an increased stock price is BCRX. BCRX announced revenue of almost $11 million from the first full quarter of sales of Orladeyo for a rare disease. This was widely seen by the market and publicized by the company, as an effective initial launch for this product, which BCRX asserts could bring in over $500 million in peak sales. BCRX was rewarded that trading day with increase in market cap of almost 21%.


Unfortunately, commercial challenges brought on by Covid was a common theme for Q1 report-outs for smid-cap biopharma companies. It was especially difficult for these smid-cap biotech companies to get time with physicians to introduce them to these products, most of which have been launched within the last few years. And patients were not going to in-person patient visits, where it seems much more likely that a physician would prescribe a new medicine.


Case in point was ESPR. ESPR, which was down almost 22% on their Q1 report-out, discussed challenges the market was having in selling cardio-vascular drugs during the peak of the pandemic in the first few months of 2021. Although they tried to spin their weak revenue ($8 million for a product that needs to generate over a billion dollars in peak sales to justify the huge spend to develop and commercialize it), as positive compared to other branded lipid reduction products, the market was disappointed by their revenue. This likely was a key driver for their CEO being replaced a few weeks after Q1 results were announced.

Become a BPIQ.com subscriber and read the full version of this story. Learn more about ESPR before they report-out this week. Learn which commercial biopharma smid-caps were the biggest winners and losers from the Q2 report-outs, before their Q3 report-out, and more. Plus, you'll get access to our database of over 550 companies, 1,800+ of their drug assets, and tools including: Catalyst Calendar, Big Movers, Company Pipelines, and more!

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