Celldex Therapeutics, Inc. (CLDX), Cytokinetics, Inc. (CYTK): Are These Top Biotech Performers Still Worth Buying?

Only a handful of stocks have gained 200% in 2013, and five of those stocks are in the biotechnology industry. Perhaps you already own one, or maybe a couple of these stocks? Maybe you are considering an investment? Well, let’s take a look at the top 5 biotech performers, and determine whether larger gains will be realized.

No. 5: Cancer Stock on the Move

Celldex Therapeutics, Inc. (NASDAQ:CLDX)
Celldex Therapeutics, Inc. (NASDAQ:CLDX) has seen a 200% gain this year after 33% of patients being treated with its breast cancer drug CDX-011, showed a response, compared to zero percent in the chemotherapy arm of the trial.

If analyst upgrades and initiations of coverage count as catalysts, then Celldex Therapeutics, Inc. (NASDAQ:CLDX) has had a busy year. But in reality, the majority of the company’s gains have occurred because expectations for CDX-011 were unusually low prior to its positive data.

Now, the company awaits results from a Phase 3 trial for its glioblastoma (brain cancer) product, rindopepimut, which I estimate has peak annual sales of $600 million.

Combined, Celldex Therapeutics, Inc. (NASDAQ:CLDX) has two late-stage successful products with peak revenue potential of $1.3 billion, and a solid pipeline. As a result, I think Celldex Therapeutics, Inc. (NASDAQ:CLDX), with a market cap of $1.6 billion, is still extremely attractive. Although, I would expect a much slower pace of gains moving forward.

No. 4: Success After Failure

Keryx Biopharmaceuticals (NASDAQ:KERX) failed to meet key endpoints in a 2012 Phase 3 study for its colorectal cancer drug perifosine, but has since rallied higher with new data in 2013. During this year, Keryx Biopharmaceuticals (NASDAQ:KERX) has traded higher by 208%, as its kidney disease drug Zerenex met its late-stage trial goal of reducing phosphate levels in blood.

According to analysts, the company’s drug, Zerenex, could generate $800 million in peak global sales and $300 million in U.S. sales.

However, this is not a company that excites me. I have watched since Zerenex’s data was announced earlier this year, and peak sales estimates have risen from $150 million, to $200 million, and now $300 million in the U.S. Unfortunately, for the company, nothing has changed with advanced kidney disease demand. Hence, I don’t think Zerenex will meet the newly inflated peak sales expectations, and with a market cap of $660 million, I think the company is fairly valued.

No. 3: A Cardiovascular Stock to Watch

The majority of Cytokinetics, Inc. (NASDAQ:CYTK)’ 226% gains in 2013 have been created since June. First, its strategic collaboration with Amgen was expanded to include Japan for the commercialization of small-molecule therapeutics for the treatment of heart failure. Then the company was selected to present results from its Phase 2 heart disease study at a prominent European event. To many, this signaled that its experimental drug for acute heart failure is working.