Isis To Profit From Pfizer's Stumble

| About: Ionis Pharmaceuticals, (IONS)

The news that Pfizer (NYSE:PFE) will halt immediately further clinical trials of its new Lipitor-combo drug, Torceptrapib, ushers in with it a sudden change of dynamics. It becomes very likely that Pfizer will attempt to strengthen its stranglehold on the statin market by purchasing another company rather than continue its attempt to grow 'organically' the new drug.

An earlier recommendation, Isis Pharmaceuticals (ISIS), is quite likely a (perhaps even, the) beneficiary of Pfizer's sudden largesse:

Isis Pharmaceuticals is a biopharmaceutical company exploiting ribonucleic acid [RNA]-based drug discovery technologies to identify and commercialize novel drugs to treat diseases. The Company, with its primary technology, antisense, creates inhibitors, called oligonucleotides, designed to hybridize, with a high-degree of specificity to their RNA target and modulate the production of specific proteins associated with disease. In its Ibis division, Isis Pharmaceuticals, Inc. has developed a system, called triangulation identification for genetic evaluation of risks [TIGER] that can, with a single test, simultaneously identify from a sample a range of infectious organisms without needing to know beforehand what might be present in the sample.

click to enlarge

I mentioned earlier that $10 represents an optimal purchase point for this stock; recent action had affirmed that notion and Monday's gap higher on the opening reifies it. (See arrows on chart above.)

I remain convinced these shares will soon trade higher, much higher. Certainly, Wall Street begins to take notice. In trading Monday, Pfizer shares were bid down ~11% whereas ISIS shares were bid higher by ~10%. And the chart tilts toward the right side of the chart -- the appropriate side, the upside.