Pharmacyclics

01/06/2014 8:00 am EST

Focus: HEALTHCARE

John McCamant

Editor, Medical Technology Stock Letter

Our top stock selection for 2014 has received three Breakthrough Therapy Designations (BTD) by the FDA, and subsequent approval, in November, for Imbruvica, a very safe pill that has shown unprecedented efficacy to treat mantle cell lymphoma (MCL), suggests John McCamant, editor of The Medical Technology Stock Letter.

The company—which we consider conservative among biotech stocks—is Pharmacyclics (PCYC). Its pill is also expected to be approved for a much larger B-cell cancer market, chronic lymphocytic leukemia (CLL), by the end of February.

The next catalyst for PCYC will be the release of data, at the end of January, from the RESONATE trial, the first Phase III study of Imbruvica in patients with refractory/relapsed CLL. RESONATE should continue to demonstrate Imbruvica's incredible efficacy and safety as a once-a-day cancer pill.

With the drug already on the market for MCL, we expect CLL sales to ramp up rapidly, as there is a large pool of CLL patients that have been watching and waiting for a safe and effective treatment for CLL.

A stronger-than-expected Imbruvica launch will force many Wall Street analysts to raise the consensus estimate, in our view, as Imbruvica may become one of the best-selling drugs ever.

Last, but not least, in early 2014, PCYC will reveal its program for autoimmune disease, leading to blockbuster new market opportunities—with an “ibrutinib-like” lead compound for rheumatoid arthritis and related conditions. PCYC is a buy under $125, with a target price of $175.

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