Recently, there have been some names in the biotech/small pharma sector that have been seeing major buying interest. This means that the following stocks have seen double-digit percentage increases in their share price within the last few trading sessions, and have seen unusually high trading volume (six or more times the usual amount).
Traders that may be interested in joining the momentum (or at least watching it) might be interested in the following companies and their recent performance:
1.) Keryx Biopharmaceuticals (KERX)
It seems that interest in KERX is growing. The stock is up about 52% in the last three months after you factor in the stock's new leg-up, which moved KERX up about 34% just this week. Volume on the stock has also skyrocketed. On January 23rd we saw 8.6 million shares traded - almost six times higher than usual.
Basically, there is growing hype over the company's upcoming phase III results for Zerenex (ferric citrate) - its treatment for hyperphosphatemia in patients with end-stage renal disease.
I think that the company has reached a pretty solid market cap at ~$275 million, but investors should use some caution if they are attempting to chase this rally.
Zerenex is Keryx's last pipeline compound (after the complete failure of perifosine in 2012). If this drug fails to receive approval for some reason, it would be absolutely terrifying for Keryx shareholders.
On the other hand, I think that Keryx has found a solid niche market for Zerenex as a supplement to dialysis treatment. Due to its market potential, I think that KERX should not have trouble reaching a market cap of two or three times its current value following an FDA approval (which could happen as early as 2014), with further upside potential given that it sees a smooth launch.
2.) Threshold Pharmaceuticals (THLD)
THLD seems to have changed it personality this year. The stock was quite predictable last year, and traded within a $4-5/range throughout the last few months of 2012. This changed on January 8th, when a sudden buying spree in the stock (which wasn't triggered by a company press release) sent the stock over 14% higher in a single session. Investors holding THLD seemed confused about the move, which resulted in profit taking that brought the stock back to its previous levels. Once again, a huge buying spree has sent THLD soaring.
Trading volume in Threshold is about six times higher than usual, and the activity seems quite lopsided in favor of the bulls. There is a surprisingly strong demand for these shares.
Its flagship product, TH-302 for pancreatic cancer, is in the process of recruitment for phase III trials which will not yield results for at least two more years. Nonetheless, the drug seems to be inducing some major hype in Threshold due to the success in phase I and phase II trials and its potential in other indications like soft tissue sarcoma (an idiopathic, sneaky form of cancer) and blood cancers. THLD has now reached a market capitalization of about $289 million, which seems to be based primarily on the potential for the drug in pancreatic cancer treatment.
3.) MAP Pharmaceuticals (MAPP)
MAP moved much higher January 23rd on news posted recently that the larger pharmaceutical company Allergan (AGN) would acquire them at a price of $25.00/share. MAPP was trading in a well-defined range of $15-$16/share prior to the announcement.
Volume on MAPP surged along with the stock's price on the 23rd, reaching almost 46 million shares traded by the closing bell. This is about 270 times the average trading volume that MAPP was seeing, and reflects the incentive for long-term MAPP holders to take profits prior to a conversion of MAPP into cash.
Shareholders of MAPP should be very excited that its investment in LEVADEX (dihydroergotamine) paid off. For those who are not familiar with the drug, it finished phase III trials years ago with statistically significant results. Its NDA for the migraine indication was initially submitted in 2011, and a CRL was issued by the FDA in 2012 due to manufacturing issues caused by a third-party. (To review the company's history, see the company's press releases)
Allergan seems to think that the drug's new NDA will be successful, and MAP shareholders already have their victory in hand. There isn't too much potential left for MAPP now that the company has already defined the price that it will be sold at, although there is some room to scalp the difference between the market price of MAPP (currently $24.71) and the buyout price of $25.00. That currently represents a guaranteed 1.17% for those who are willing to wait until the buyout is finalized. This seems to be a result of the profit-taking from long-term holders of MAPP who want to cash out - perhaps due to impatience.