Back in August 2011, for the very first edition of Private Briefing, I recommended a Belgian biotech firm that I said was “like buying an independent drug development lab” for less than nine bucks a share – $8.60, in fact.
I zeroed in on the company’s collaborative partnerships on a whole slew of drug development programs.
[ad#Google Adsense 336×280-IA]Now, I love to see this in a biotech stock, because it means that some of the usual risks of owning a small, clinical-stage company – running out of money, or the risk of one trial failure wiping out the firm – were minimized.
That arrangement was critical in the massive, almost tenfold gains that followed.
(And, as you’ll see, it’s going to be just as important in the bigger gains I see down the road for the folks who bought this company.)
I’ve recommended these shares for my subscribers more than a dozen times since, each time before a fresh bumper crop of profits.
This company has given more than 931% in peak gains for Private Briefing subscribers, and a market-crushing 26% since I first shared it with Money Morning Members in September 2016.
There’s a very specific reason I see these gains getting even bigger for everyone in the future…
Galapagos Has Incredible Potential Ahead
Galapagos (GLPG) was trading at right around $71 a share when I first took this stock “big” in Money Morning. This week, on Tuesday, it hit a new high at $88.50.
One of the big reasons for this action: Galapagos’ flagship drug, filgotinib, which the company is developing to fight both rheumatoid arthritis (RA) and Crohn’s disease (CD).
CD was named after Dr. Burrill B. Crohn, who first described the disease in 1932. Crohn’s disease – a chronic inflammatory condition of the gastrointestinal tract – belongs to a group of conditions known as inflammatory bowel diseases (IBD).
As many as 780,000 Americans are afflicted by CD. Although men and women are equally likely to be affected, Crohn’s is more prevalent among adolescents and young adults aged 15 to 35.
The market for Crohn’s drugs is expected to reach $4.2 billion by 2022, according to a report from research and consulting firm GlobalData. And that means the dominant drug will qualify as a “blockbuster” – the Holy Grail for biotechs.
The latest boost in Galapagos’ share price comes from this news:
It just announced two new phase 2 clinical trials – in partnership with Gilead Sciences Inc. (Nasdaq: GILD) – to evaluate filgotinib in patients with small-bowel Crohn’s disease, as well as in patients with fistulizing Crohn’s disease.
The drug is thought to have a lot of promise because it very “selectively” zeros in on the JAK1 inhibitor.
Here’s why that’s important from a medical standpoint – and so intriguing from an investor’s point of view.
There are other JAK inhibitor drugs already on the market, including a Pfizer Inc. (NYSE: PFE) drug called tofacitinib. But they are less selective, meaning they inhibit several or all of the JAK inhibitors. And that leads to side effects that mean doctors must prescribe dosing limits that cap effectiveness.
For instance, a drug that’s supposed to be a JAK1 inhibitor – but whose lack of selectivity also makes it a JAK2 inhibitor – may lead to anemia and a fatigue-inducing/energy-sapping blood disorder known as thrombopenia.
That’s the thinking behind the development of newer and more selective inhibitors like filgotinib.
That could easily lead to another round (or 10) of runaway gains.
And it’s a huge reason I continue to be so intrigued by Galapagos in particular and the biotech sector in general. You see, in addition to the 931% from Galapagos, we’ve reaped some outsized peak gains from some of the biotech shares I track – 803%, plus a number of other 100%-plus winners.
— William Patalon III
Source: Money Morning