Spending on cancer treatment has been skyrocketing globally. According to the IMS Institute of Health, spending on cancer topped $100 billion globally in 2014. That was a 10% increase from 2013.
That's why many biotech stocks tied to cancer treatments have seen triple-digit gains in the last two years.
Take Puma Biotechnology Inc. (NYSE: PBYI), for example. The company released positive clinical trial results on a breast cancer drug in July 2014, and its stock soared 300% in one trading session.
CytRX Corp. (NASDAQ: CYTR) announced positive results from its brain cancer drug on Jan. 7, 2015, and its stock climbed almost 16% in one day. Year to date, it's up 46%.
Now, Money Morning Biotech Investing Specialist Ernie Tremblay has found a new biotech stock to buy that could be the next cancer blockbuster…
Finding the Next Blockbuster Biotech Stocks
Picking the next biotech stock winner is difficult. When it comes to finding successful cancer treatment drugs, Tremblay says "the odds are not in your favor."
That's because fewer than 10% of experimental drugs designed to treat solid tumors make it to final Food and Drug Administration approval, according to a study by Clinical Pharmacology and Therapeutics. So if you picked 10 biotech stocks, you'd be lucky to find one successful drug.
Drugs designed to treat blood cancers have a higher success rate, but it's still low at just 36%.
But now one company is working on a new type of cancer treatment, and it could create the next blockbuster biotech stock.
You see, when cells get sick or damaged, the body sends scavenger cells called macrophages to devour them. This process is called phagocytosis.
"Nearby healthy cells avoid this fate because they carry significant amounts of a signal protein, CD47, on their surfaces, which acts like a flashing sign that says, 'Do not eat me!'" Tremblay explained. "Unhealthy cells lose much of their ability to express CD47 and also give off other signals that attract hungry macrophages. They quickly become lunch."
Unfortunately, cancer cells have the ability to produce CD47 and camouflage themselves.
That has scientists working to develop a CD47 blockade. It's a treatment that would prevent cancer cells from producing the protein.
"This approach to fighting blood cancers is extremely promising, but it's not the end of the story," Tremblay said. "As it turns out, CD47 blockade may be a treatment that works against all cancers – there are more than 200 variations – because all malignant tumors, no matter the type, express CD47 for survival.
"Until now, researchers have assumed there would never be this kind of 'magic bullet.'"
And one company in particular is at the forefront of this new treatment…