22 Biopharma Stocks With Breakout Potential in 2012

BOSTON ( TheStreet) -- Drug approval decisions garner big headlines, but savvy and successful biotech investors know that making smart trading decisions ahead of important clinical trial results is the ticket to banking serious coin.

The market value of Vertex Pharmaceuticals ( VRTX) has jumped by $5 billion in the past three weeks based solely on positive, interim results from a phase II cystic fibrosis trial. That stands in stark contrast to Vertex's falling stock price following the approval of its hepatitis C drug Incivek.

Only in biotech can a single event like the announcement of new clinical data lead to such incredible and immediate profits for investors. Like the lottery slogan says, "You have to be in it, to win it," which for biotech investors and traders means knowing in advance the companies conducting important clinical trials and when to expect the announcement of results.

To kick-start the research process, I've compiled a list of 21 drugs and a single diagnostic test currently involved in phase II and phase III trials. Importantly, results from these clinical trials are all expected before the end of the year. Some as early as by the end of the current quarter.

I can't guarantee that any or all of these biotech and drug stocks will mimic the spectacular stock return delivered by Vertex in May, but there are surely some rockets on this list. Happy Hunting!

For ease of use, I've organized the list of 2012 clinical trials in alphabetical order by the company developing the drug. All timelines for data announcements are best estimates based on company guidance.

Without further adieu: The must-know list of 2012 clinical trials:

Acadia Pharmaceuticals ( ACAD)
Drug/indication: Pimavanserin in Parkinson's disease psychosis (phase III study)
Top-line results expected in the third quarter of 2012
The "020" trial compares pimavanserin against placebo in patients suffering from psychosis due to Parkinson's disease. The primary endpoint is the reduction in antipsychotic behavior measured using the Scale for the Assessment of Positive Symptoms (SAPS).
Two previous phase III studies of pimavanserin in patients with Parkinson's psychosis failed to demonstrate a statistically significant benefit. The ongoing "020" study was designed to diminish the effect of a placebo response and produce data that are less subject to variability.

Amicus Therapeutics ( FOLD)
Drug/indication: migalastat (Amigal) in Fabry disease
Top-line results expected in the third quarter 2012
"Study 011" compares migalastat to a placebo in patients with Fabry disease. A second phase III study "013" compares migalastat against current standard-of-care therapies for Fabry disease, Fabrazyme or Replagal.

Anthera Pharmaceuticals ( ANTH)
Drug/indication: Blisibimod for lupus (phase II trial)
Top-line results expected at the end of the second quarter
The "PEARL-SC" trial randomizes lupus patients to treatment with blisibimod or placebo with a primary endpoint of clinical improvement at 24 weeks in the SLE responder index, the same endpoint that Human Genome Sciences used to demonstrate the clinical efficacy of Benylsta.

Arqule ( ARQL)
Drug/indication: Tivantinib in non-small cell lung cancer (phase III)
Top-line results expected in second half of 2012
The "MARQUEE" trial compares tivantinib plus Takeda's Tarceva against Tarceva alone in previously treated non-small cell lung cancer patients. The study's primary endpoint is overall survival.
Arqule and partner Daiichi Sankyo will conduct an interim analysis of the tivantinib study after 50% of the planned patient deaths have occurred. This is the top-line result that will be ready in the second half of 2012. The final analysis of the trial isn't expected until next year.

Auxilium Pharmaceuticals ( AUXL)
Drug/indication: Xiaflex for Peyronie's disease (Phase III trial)
Top-line results expected before end of June
Peyronie's is a buildup of scar tissue that causes extreme (and uncomfortable) curvature of the penis during an erection. Auxilium's "IMPRESS" study compares Xiaflex to placebo injections with co-primary endpoints of improvement in curvature and quality of life measure.
Xiaflex is currently approved for Dupuytren's Contracture, a similar disease that causes involuntary curling of the fingers. Expansion into Peyronies could be a $300-500 million market opportunity for Auxilium.

Biogen Idec ( BIIB)
Drug/indication: Long-lasting rFactor VIII for hemophilia A; long-lasting rFactor IX for hemophilia B; dexpramipexole for amyotrophic lateral sclerosis (ALS) or Lou Gehrig's disease. (All phase III trials)
Top-line results expected in the second half 2012
With its hemophilia and ALS programs, Biogen has the opportunity to diversify outside of its dominant position in multiple sclerosis. The dexpramipexole trial carries the biggest risk but also the most potential upside given a lack of effective therapies for ALS patients. Data from the phase III "EMPOWER" study are expected in the fourth quarter.

Biomarin Pharmaceuticals ( BMRN)
Drug/indication: GALNS for MPS IV also known as Morquio Syndrome (Phase III trial)
Top-line results expected in the fourth quarter 2012
Positive data from orphan disease drug studies have a jumbo-sized effect on stock prices. (See Alexion Pharmaceuticals and Vertex Pharmaceuticals.) The phase III study of GALNS in MPS IV patients, if successful, could double Biomarin's revenue over the next five years and be the trigger for a takeout by a large pharmaceutical company eager to profit from the booming business of developing new therapies for rare, genetic diseases.

Celgene ( CELG)
Drug/indication: Apremilast for psoriasis and psoriatic arthritis (phase III) and rheumatoid arthritis (phase II)
Top-line results expected in the second half of the year.
Achieving European approval for first-line use of Revlimid in multiple myeloma remains the most important catalyst for the stock in the remainder of 2012. After that, however, Celgene becomes a clinical trial story for the first time in awhile. As a pill, apremilast has the potential to take a bit out of the market share in psoriasis and rheumatoid arthritis now dominated by biologic injectable therapies.

Celsion ( CLSN)
Drug/indication: Thermodox in liver cancer (phase III trial)
Top-line results expected in the fourth quarter
The "HEAT" study compares Thermodox plus radiofrequency thermal ablation (RFA) versus RFA alone in patients with primary liver cancer. The primary endpoint of the study is improvement in progression-free survival.
An interim analysis of the "HEAT" study was conducted in November 2011 but did not result in a patient benefit large enough to stop the study early.

ChemoCentryx ( CCXI)
Drug/indication: CCX140 for diabetic nephropathy (phase II trials)
Top-line results expected in late fourth quarter 2012 but possibly early 2013
ChemoCentryx is conducting two phase II studies of CCX140 versus placebo in patients with diabetic nephropathy.

Clovis Oncology ( CLVS)
Drug/indication: CO-101 for pancreatic cancer (phase III trial)
Top-line results expected in fourth quarter
The "LEAP" study compares CO-101 versus gemcitabine in metastatic, chemo-naive pancreatic cancer patients whose tumors express low levels of hENT1, a protein which gemcitabine requires to enter cells. Survival is the study's primary endpoint.

Eli Lilly ( LLY)
Johnson & Johnson ( JNJ), Pfizer ( PFE), Elan ( ELN)
Drugs/indication: Solanezumab and bapineuzumab for Alzheimer's disease. (phase III trials)
Expected top-line results: Second half 2012
Two different drugs in separate and large phase III clinical trial programs, but solanezumab and bapineuzumab are linked because both are antibodies designed to break up sticky clumps of protein known as amyloid beta that lodge in the brain and are believed to cause the memory problems which are the signal manifestation of Alzheimer's disease.
Lilly is conducting two, large phase III studies (EXPEDITION AND EXPEDITION II) of solanezumab in patients with mild to moderate Alzheimer's. The studies' primary endpoint is change or improvement in memory (cognition) and activities of daily loiving. Results from a previous phase II study showed no benefit for patients while a different but similar Lilly Alzheimer's drug, semegacestat, failed a phase III study in 2010. Semegacestat-treated patients actually did worse than placebo.
Johnson & Johnson is conducting four phase III studies of bapineuzumab, separated into North American and rest -of-world patients as well as patients who carry or don't carry the APOE4 gene, a marker for more aggressive and earlier-onset Alzheimer's. Primary endpoints are the same as those used in the solanezumab studies. A phase II study of bapineuzumab failed to demonstrate a benefit for Alzheimer's patients.

Exact Sciences ( EXAS)
Diagnostic/indication: Cologuard to detect colon cancer and pre-cancerous polyps in the colon. (phase III trial)
Top-line results expected in the fourth quarter.
Cologuard is a non-invasive test designed to measure genetic abnormalities in stool that detects early-stage colon cancer and pre-cancerous polyps. Currently available colon cancer screening test can't reliably detect cancer at early stages, which means patients at risk must undergo expensive and invasive colonoscopies. Cologuard won't replace colonoscopies but could cut down on the number of the invasive tests performed.
The phase III "Deep-C" study is designed to prospectively validate the sensitivity and specificity of Cologuard compared to colonoscopy. If positive, Exact Sciences will seek FDA approval in the first quarter of next year.

Geron ( GERN)
Drug/indication: Imetelstat in non-small cell lung cancer (phase II trial)
Top-line results expected in the fourth quarter

Geron ( GERN) took a beating late last year when it gave up on its embryonic stem cell therapy. Now, the company is focusing its drug development activities on its cancer therapeutics, many of which pre-date its stem-cell research. Geron will help its turnaround efforts a great deal if it can manage to produce a win from a phase II lung cancer study of imetelstat.
The study compares imetelstat to standard of care as maintenance therapy in non-small cell lung cancer patients who responded to previous chemotherapy. The primary endpoint is improvement in progression-free survival.

Lexicon Pharmaceuticals ( LXRX)
Drug/indication: LX4211 in Type 2 diabetes (phase II trial)
Top line results expected by the end of the second quarter
The phase II study compares LX4211 plus metformin to metformin alone in type 2 diabetes patients with inadequate blood sugar control. The study's primary endpoint will measure the change in HbA1c, or blood glucose levels from baseline to week 12.

Nektar Therapeutics ( NKTR)
Drug/indication: NKTR-118 for opioid-induced constipation (phase III trials)
Top-line results expected in the fourth quarter
Nektar's partner Astrazeneca ( AZN) is conducting the "KODIAC" trials, consisting of two phase III placebo-controlled efficacy and an open-label, placebo-controlled long-term safety study. The studies are designed to determine the efficacy and safety of NKTR-118, a once-daily tablet, for the treatment of constipation in patients taking prescription opioid medications.

Vical ( VICL)
Drug/indication: Allovectin in melanoma (phase III trial)
Top-line results expected in the fourth quarter
The phase III study compares Allovectin (injected directly into melanoma lesions) to dacarbazine or temozolomide in patients with recurrent metastatic melanoma. The primary endpoint of the study is durable response rate at 24 weeks but the more important and necessary (for approval) secondary endpoint is overall survival.

Zalicus ( ZLCS)
Drug/indication: Synavive AR in rheumatoid arthritis (phase II trial)
Top-line results expected in third quarter 2012
The "SYNERGY" trial evaluates the efficacy of Synavive AR, a combination pill comprised of the cardiovascular drug dipyridamole and a very low dose of the steroid prednisone, in patients with rheumatoid arthritis. Synavive is being compared with placebo and against the individual components. The study's primary endpoint is reduction in c-reactive protein (measured by DAS28 scale); key secondary endpoints are reductions in signs and symptoms of rheumatoid arthritis, measured by ACR20, ACR50 and ACR70 scales.

Ziopharm ( ZIOP)
Drug/indication: Palifosfamide in sarcoma (phase III trial)
Top-line results expected in the second half of 2012
"PICASSO III" compares palifosfamide plus doxorubicin to doxorubicin alone in patients with front-line metastatic soft-tissue sarcoma. The study's primary endpoint is improvement in progression-free survival (for accelerated approval) and overall survival (for full approval). Sources: TheStreet research; BioMedTracker, a provider of independent research on biotechnology and pharmaceutical developments; and company and analyst reports.

>>To see these stocks in action, visit the 22 Biopharma Stocks With Breakout Potential in 2012 portfolio on Stockpickr.

--Written by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.