3 Biotech Firms With Major Potential Catalysts in the Coming Months

Key Points

• For biopharma companies, a huge amount relies on key FDA approvals or strong data readouts from clinical trials.
• Two companies with promising drug candidates in line for potential upcoming approvals are VERA and KRYS.
• ADMA may be in a different position thanks to its strong preexisting products but still has a potential catalyst on the horizon.

As Big Pharma braces for a looming patent cliff that threatens billions in revenue, a different group of companies is chasing the opposite story: a single breakthrough that could define their future. For these smaller players, one strong trial readout or FDA approval can mean the difference between a breakout and a bust.

Below, we look at several companies that investors willing to take a bit of a risk on the pharma industry may want to keep watch over. Two have key upcoming FDA decisions looming, although on slightly different timelines. The third offers a varied approach: as a company with multiple products already on the market, it doesn't rely quite so heavily on a single strong data release or FDA announcement, though it can still benefit from such developments.

Vera Makes Big Moves in the Nephrology Space

A clinical-stage biotech company creating immunotherapies for autoimmune and inflammatory diseases, Vera Therapeutics NASDAQ: VERA has a major pending FDA decision that could be instrumental for the company. Vera is working toward a Biologics License Application (BLA) for atacicept, an investigational drug with the potential to address IgA nephropathy, an autoimmune kidney disease.

Early in June, the company reported an optimistic update, including its alignment with the FDA on a revised ORIGIN 3 eGFR analysis plan with an accelerated timeline. Assuming this goes well in Q3, Vera will likely submit its BLA before the end of the year.

If atacicept receives full approval, it could open up major commercial potential in the fast-growing, $20-billion global nephrology market. On the other hand, a negative decision or even a delay in the eGFR process could be detrimental to VERA shares.

For the time being, analysts are bullish: 10 out of 12 ratings are Buys, and Wall Street anticipates the stock to climb by 120%.

A Gene Therapy Winner Awaits 2 New Sets of Data

Krystal Biotech NASDAQ: KRYS is a gene therapy company creating novel therapies for dermatological diseases. The company has already seen significant success with Vyjuvek, the first gene therapy ever approved for a skin condition. This may give investors additional optimism as the company prepares for two upcoming data readouts that could provide even more momentum. Vyjuvek revenue was $116 million in the first quarter, up 32% year-over-year (YOY).

The firm's KB803 is currently in trials related to its potential as a treatment for corneal abrasion for patients with dystrophic epidermolysis bullosa, with top-line results expected by the end of this year. Additionally, Krystal has a second candidate in line for a registrational data readout in 2026: KB801 is in studies for its potential as a treatment for neurotrophic keratitis.

Though niche, each of these drugs has the potential to address previously underserved corners of the market and could strengthen Krystal's overall portfolio significantly.

Ten out of 12 analysts call KRYS shares a Buy, although with more than 40% returns year-to-date (YTD), investors may be concerned about how much upside potential remains in the near term.

An Established Player With a Promising Long-Horizon Prospect

ADMA Biologics NASDAQ: ADMA is a biopharma firm that develops plasma-based biologics to treat immunodeficiency and infectious diseases. The company is in a different place from others in the field because it already has multiple products on the market and strong revenue (including 28% YOY growth last quarter from ASCENIV).

As such, ADMA is less reliant on promising news from the FDA or from data readouts from its clinical trials, although these kinds of updates can still catalyze new growth. Instead, some of the appeal of ADMA is its margin expansion, which is possible thanks to a new set of manufacturing efficiencies begun in the last several quarters.

That's not to say that the company has no products on the horizon, though, and SG-001—an investigative hyperimmune globulin candidate for pneumococcal disease—is among the most promising.

Investors might expect a boost to ADMA stock if and when positive results are released about this candidate, but in the meantime, the draw may be more focused on the stability that ADMA's preexisting products already offer.

ADMA shares are down considerably YTD, falling by over 50% in that period. However, this makes the company's value prospects more attractive, particularly as its price-to-earnings (P/E) ratio of 12 is considerably lower than the broader sector. Plus, analysts feel there is plenty of room for growth based on upside forecasts of more than 130%.