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Measuring Immunotherapy’s Past Year

  • January 4, 2016

  • 2015 was another year of outperformance for cancer immunotherapy companies. As measured by the Loncar Cancer Immunotherapy Index, cancer immunotherapy stocks were up 19.2% in 2015 versus 11.4% for the Nasdaq Biotechnology Index. This is in stark contrast to the broader stock market, as the Standard and Poor’s 500 Index fell 0.7% in 2015, its worst year since the financial crisis . There are a few insights that the entire cancer immunotherapy field can take away from how these publicly-traded companies performed last year.

    loncar Immunotherapy Index

    1. Even in a tough market, there is still plenty of reward for innovation.

    Immunotherapy was the brightest star in one of the stock market’s only positive sectors. While there was a global slowdown in commodity and industrial sectors, investors have still shown a willingness to pay up for growth and innovation. That is a positive for areas of innovation like immunotherapy. The healthy appetite for immunotherapy is simultaneously seen in public companies and the venture capital and private equity markets.

    2. Regulatory successes from leaders have supported the field.

    We have not only seen speedy approvals for PD-1’s in melanoma, lung cancer, and kidney cancer, but bispecific technologies and the first oncolytic virus were also recently approved. Regardless of whether these end up being commercial successes, do not discount how much their approval has been an important signal to investors who continue supporting new technologies. When there is evidence of regulatory support and a real path to market for alternative therapies, fundraising is easier for the whole sector.

    3. Immunotherapy valuations will be highly affected by the political environment.

    As measured by the Loncar Index, cancer immunotherapy stocks initially declined 25% from their peak when Hillary Clinton issued her now infamous September tweet about cracking down on drug spending. Given how immunotherapy is an emerging field, future political events will have an outsized impact on its prospects. It is important that the political class ultimately makes a distinction between raising the prices on old drugs and ensuring future innovation for new therapies is still fostered. In the meantime, expect volatility.

    Guest Submission By: Brad Loncar

    You can learn more about how cancer immunotherapy stocks trade by following the Loncar Cancer Immunotherapy Index at