For this week, Stockmatusow.com has compiled 4 biopharmas with significant near-term catalysts ahead that should drive their respective stock prices higher. We think each of these companies should also be looked at for speculation investments. Since the companies listed below are smaller caps, they carry significant risk. However, if traded properly, they should yield some nice short-term returns provided the overall market remains stable.
Antares Pharma (ATRS) Antares has a Prescription Drug User Fee Act (PDUFA) date of October 14, 2013 for the Food and Drug Administration (FDA) to either accept or reject its proprietary self injector, OTREXUP. OTREXUP is designed for rapid subcutaneous self-administration of methotrexate (MTX).
MTX is used for the treatment of rheumatic Arthritis (RA), and can be self-injected, which might be a preferred solution by patients and caretakers over less costly, but also less effective oral tablets.
As a pre-biologic treatment, it's possible that OTREXUP could play an important role in lowering healthcare costs in RA by delaying the use of biologic agents and expanding the use of MTX. The availability of OTREXUP could give patients and physicians a new option before making the jump to expensive biologics, which are associated with serious and increased safety risks for RA patients.
If taken over an extended period of time, Oral MTX could cause liver damage, whereas injected MTX goes directly into the bloodstream, bypassing some liver functions. Therefore, it's our estimation that OTREXUP, if presented correctly to insurance companies and marketed effectively, could see peak sales of $400M. Based on this potential, we believe it's possible for Antares to reach a stock price of near $6 before the PDUFA decision, which would equate to around a $700M market cap.
The Antares chart is showing nice and steady accumulation. The yellow line is the relative strength index, which is very close to breaking out. With strong volume, Antares may see a move to over $4.75 soon.
GTx Inc. (GTXI) GTx is expecting to release topline data for its two Phase III trials (POWER 1 and POWER 2) for its drug enobosarm. Enobosarm is designed to prevent and treat muscle wasting in patients with non-small cell lung cancer (NSCLC).
Muscle wasting is a common problem for patients with NSCLC, and can be quite debilitating. In fact, 88% of patients report they have difficulty doing everyday activities such as climbing stairs, for an example. Muscle loss/wasting is a common cancer symptom that can be caused by the underlying condition or the side effects of several chemotherapy drugs. Nearly half of NSCLC patients present severe muscle loss and 70% have muscle loss before death.
Based on the heavy open interest in the August option chain, we speculate the data release will occur after the July option expiry, but before the August expiration date -- between the third week in July, and second week in August.
The upcoming data from these trials are of the utmost importance for patients with muscle wasting because there is currently no approved treatment, so treatment for muscle wasting is an unmet need.
The GTx chart needs one more solid candle to confirm a resumption of its shorter-term uptrend. We expect to see resistance at $7, $7.14, and $7.25. If the volume increases and can carry the stock past $7.25, then we might see a break out with GTx. With a market cap of $427.99M, we believe GTx is undervalued here.
ChemoCentryx (CCXI) is expected to report 12-week Phase II clinical trial data in the current quarter for its drug CCX140, designed to treat diabetic nephropathy. CCX-140 is an inhibitor of the chemokine receptor known as CCR2 and is the Company's lead proprietary drug candidate. Diabetic nephropathy is a progressive kidney disease caused by angiopathy of capillaries in the kidney glomeruli.
Diabetic nephropathy affects 25-35% of patients under the age of 30 years, and is also the leading cause of premature death in diabetic patients between 50 and 70 years old.
The data release here is an important catalyst, so we expect to see some decent stock appreciation. However, because the exact date for the data release is not specifically known, the risk is a bit higher holding the stock, and timing for price appreciation a bit more uncertain.
The first thing to take note of in the Chemo chart above is the very strong accumulation shown in the purple line. The chart also shows a strong continuation pattern setting up with a short-term cup and handle pattern. We believe Chemo's stock should approach $15.50 to $16 before its catalyst event.
Sangamo Biosciences (SGMO) is a biopharmaceutical company focused on engineering DNA-binding proteins to develop therapies for unmet medical needs. Sangamo uses its Zinc Finger Protein (ZFP) platform for its SB-728 program. SB-728 is for use with Human Immunodeficiency Virus (HIV), which left untreated can lead to Acquired Immunodeficiency Syndrome (AIDS). On May 15, Sangamo presented encouraging data for its SB-728-T program at the 16th Annual Meeting of the American Society of Gene and Cell Therapy (ASGCT). Sangamo Vice President Dale Ando stated:
These data are quite remarkable. In previous clinical studies, a decline in the HIV reservoir has never been observed in subjects on long-term anti-retroviral therapy (ART) and any increase in the levels of CD4 cells in HIV-infected subjects is often associated with a concomitant increase in the size of the reservoir. In contrast, a single SB-728-T treatment of subjects on long-term ART produced a significant and durable improvement in CD4 count and, in the majority of subjects, a notable decrease in the HIV reservoir over time. An observed correlation with circulating ZFN CCR5 protected CD4 cells is extremely promising.
According to a recent press release, Sangamo will provide an update on the progress of its ZFP Therapeutic® development programs and an overview of the company's business strategy at 1:30 pm ET on Wednesday, July 10, 2013, at the 8th Annual JMP Securities Healthcare Conference which will be held in New York City. These large conferences can generate significant buzz for a company and lead to a significant run if "big money" likes the presentation. The company also states that it expects to announce Phase I/II data of SB-728-1101 for HIV and Phase II data of SB-728-902 for HIV before the end of the year. The recent 10-K states:
Our lead ZFP Therapeutic, SB-728-T, a ZFN-modified autologous T-cell product for the treatment of HIV/AIDS, is the first therapeutic application of our ZFN technology and is being evaluated in ongoing clinical trials, the most advanced of which are a Phase 2 study (SB-728-902 Cohort 5) and a Phase 1/2 study (SB-728-1102) in HIV-infected subjects. We expect to present data from these programs at appropriate scientific and medical meetings in 2013.
We expect the stock to continue upwards before Wednesday's conference, and possibly through the rest of 2013 in anticipation of data releases.
The chart is breaking out of a descending wedge and looks to be reversing into a new up-channel. Good traders look for a break in a descending wedge pattern. When they see it, most of the time the stock will move 50% upwards from the break and to a high point where the original descending pattern began. The relative strength index (RSI) also seems to suggest the stock is close to breaking out.
Therefore, we expect Sangamo to reach $9.25-$9.50 very soon, and possibly higher after its JPM presentation.
If data presented later this year were positive, it would mark a significant milestone for the company, as any company with a potential cure for HIV would be extremely valuable.
Sangamo is a high-risk investment in terms of its platform to ultimately succeed. However, if it does ultimately succeed, its current market cap of $454.97M would be tremendously undervalued, and the stock would be at least a 5x gainer. We believe Sangamo has the highest long-term risk, but also the highest reward potential out of the 5 stocks mentioned here.
Disclosure: I am long SGMO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Disclaimer: This article is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are my opinions only. Trading stocks is risky -- always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.