6 Healthcare Stocks to Watch

The market experienced broad declines on Monday, hurt by weak economic data - a sharp contrast to last week when the Dow industrials rallied to turn positive for the year, increasing hopes that the economy is starting to turn around. Some key reports issued on Monday helped underscore the fact that the economy is still struggling. At mid-month, a New York state manufacturing survey (which often indicates where the country is headed) showed a decline in orders from just thirty days ago. In addition, more than half of the manufacturing respondents said that they had pared capital spending this year. Adding to the mix, the National Association of Home Builders housing-market index fell in June as higher mortgage rates damped demand. That didn't help set the table for a good week, but we'll see how things play out for the beaten bulls as the week goes on.

In the healthcare sector, Jazz Pharmaceuticals, Inc (NASDAQ:JAZZ), which had a good day last week, is off to another good start. The stock closed up +1.92 (72.73%) to $4.56 after the company's Sodium oxybate or JZP-6 demonstrated statistically significant and clinically meaningful improvement in pain and the core symptoms associated with fibromyalgia, according to Phase III data presented at the 2009 Associated Professional Sleep Societies meeting in Seattle, WA. The company said that these data have not been evaluated by the FDA or other regulatory authorities for use of sodium oxybate in the treatment of fibromyalgia. Assuming positive results for the second study, the company anticipates submitting a New Drug Application for sodium oxybate for the treatment of fibromyalgia to the U.S. Food and Drug Administration by the end of 2009.

AEterna Zentaris Inc. (NASDAQ:AEZS) closed up $.41 (22.78%) after the company said it will report patient follow-up results from its Phase 3 program in benign prostatic hyperplasia with cetrorelix ahead of schedule. Results will now be reported in the third quarter instead of the fourth. AEterna Zentaris Inc. is a global biopharmaceutical company focused on endocrine therapy and oncology.

K-V Pharmaceutical Co. (NYSE:KV.A) jumped another $.52 (22.22%) after last week's news that it has entered into a settlement agreement with privately held Purdue Pharma L.P. of Stamford, Conn., in regard to the patent infringement lawsuit between the two companies.

Purdue will grant KV Pharmaceutical certain limited non-exclusive, royalty-bearing, non-transferable rights to sell in the United States generic versions of the drug OxyContin (oxycodone HCl controlled-release) for a limited period of time. KV Pharmaceutical Company is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products

Last week's big winner, Chindex Intl, Inc. (NASDAQ:CHDX), an American healthcare company that provides healthcare services and supplies medical capital equipment, instrumentation and products to the Chinese marketplace, gave back some "buy on rumor sell on news" gains as it officially reported a net income of $3.4 million, or $0.22 per diluted share, for the fourth quarter ended March 31, 2009, compared to a net loss of $2.7 million, or $0.20 per diluted share, for the same quarter ended March 31, 2008. Shares closed at $12.88 after losing $2.32 (-15.26%). Roberta Lipson, president and CEO of Chindex, said: "During the fourth quarter and full year, we achieved our goals to make substantial progress on our KfW and US Export-Import Bank contracts, and enhanced our revenue performance in hospital services, although patient volumes were slightly less than anticipated."

Kendle International Inc. (NASDAQ:KNDL), had posted gains in the last 10 of 11 sessions. This is a stock whose investors feel has a $20+ book value, but it gapped down Monday morning and never recovered, closing at $13.89 -2.17 (-13.51%). The company is a clinical research organization, and provides clinical development services on a contract basis to the biopharmaceutical industry worldwide. It announced last week that it has opened up new offices in Malaysia, Thailand and the Philippines as part of a continued drive to access patient populations around the world.

Also on the losing side - if only for the day - was Biodel Inc. (NASDAQ:BIOD), a development-stage specialty pharmaceutical company focused on the development and commercialization of treatments for endocrine disorders, such as diabetes and osteoporosis. Shares were down 11.93%, but excited investors feel that shares may triple for this cash rich biotech firm whose product candidates are developed using VIAdel technology, which reformulates existing FDA-approved peptide drugs. Up for FDA approval soon is VIAject, a very rapid-acting form of injectable human insulin for meal-time use by patients with Type 1 or Type 2 diabetes. VIAject is comprised of commercially available recombinant human insulin and the company's own proprietary formulation of ingredients (all of which are Generally Regarded As Safe by the FDA). That same formulation delivers insulin in a form which more closely resembles the way a normal body uses insulin to help glucose enter the body's cells, providing energy that allows the body to function. Currently, insulin therapies are not delivered quickly enough to simulate the desired meal-time insulin spike. As our subscribers can see in our FDA Calendar, Biodel is now preparing its NDA submission, but if the FDA approves VIAject and sales reach only 1% of all diabetics in the US, revenue could easily surpass $250 million per year. This stock goes on my "stocks to watch" list as it closes the day at $5.24 -0.71 (-11.93%).

Gainers (% price change)	Last Trade	Change	Mkt Cap
Jazz Pharmaceuticals, Inc	JAZZ	4.56	+1.92 (72.73%)	131.90M
AEterna Zentaris Inc	AEZS	2.21	+0.41 (22.78%)	117.54M
K-V Pharmaceutical Co.	KV.A	2.86	+0.52 (22.22%)	142.85M
Arena Pharmaceuticals	ARNA	5.47	+0.48 (9.62%)	437.77M
Losers (% price change)
Chindex Intl., Inc.	CHDX	12.88	-2.32 (-15.26%)	188.23M
Kendle International Inc.	KNDL	13.89	-2.17 (-13.51%)	206.25M
Biodel Inc	BIOD	5.24	-0.71 (-11.93%)	124.31M
Merge Healthcare Inc.	MRGE	3.48	-0.40 (-10.31%)	197.57M
Most Active (dollar volume)
Pfizer Inc.	PFE	14.13	-0.63 (-4.27%)	95.35B
Johnson & Johnson	JNJ	54.75	-1.31 (-2.34%)	150.87B
Wyeth	WYE	43.95	-0.85 (-1.90%)	58.61B
Merck & Co., Inc.	MRK	24.96	-1.12 (-4.29%)	52.63B
Abbott Laboratories	ABT	44.73	-0.69 (-1.52%)	69.13B

Comments

[PhillyDan:]

Good update. Arena is poised to bust open once it's Blossom results for Lorcaserin, it's anti-obesity drug are announced in mid to late September timeframe. These results will strengthen the already excellent results for primary and secondary endpoints that were announced at the American Diabetes Association meeting in New Orleans back on June 6th. In addition, Arena should receive a milestone payment in the July quarter from Ortho-McNeil (J&J) as part of their collaboration on a drug candidate for type II diabetes which is entering a second phase I clinical trial being done by OM.

Arena is moving along with serious discussions regarding a partnership deal for Lorcaserin and that will probably occur after the Blossom results are announced. In addition, they very well could have a partnership deal in place for one of their other drug candidates, my "speculation" would be the arterial thrombosis drug candidate. After the Blossom results, they will be well on track to file an NDA with the FDA by the end of 2009.

With "Wellness and Preventative" medicine going to get a big push in the upcoming Healthcare reform, this should bode well for Arena (also for Vivus and Orexigen) as obesity and diabetes type II are two of the chronic diseases that are directly or indirectly related to a large part of our healthcare cost burden. Having a safe, effective anti-obesity drug like Lorcaserin in a physician's wellness arsenal will go a long way to reducing the obesity epidemic that our nation faces.

Arena is a healthcare stock for the long term.

Jun 16 07:30 PM