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With the announcement Tuesday that Valeant Pharmaceuticals (NYSE:VRX) offers to buy drugmaker Cephalon (NASDAQ:CEPH) for ~$5.7B in cash, or $73/share - a 24 percent premium above Tuesday's closing price - now may be a good time to discuss some of the companies that may make big headlines over the next few years as they develop new and revolutionary drugs, form important partnerships, or even get bought out for high premiums. We were lucky enough to have CEPH in our portfolio for the past few days, just in time to cash in on the buyout announcement; and we'd probably be highly disappointed if we failed to take advantage of the opportunities many of the following companies present.

Albany Molecular Research (NASDAQ:AMRI):
Involved in drug discovery services, with a market cap of $125 million, AMRI offers good value right near its 52 week low. With over 33 percent of shares held by insiders, AMRI also shows strong faith among its employees. Moreover, with over $41 million in cash, AMRI looks relatively strong financially. Support at $4.00.

Ariad Pharmaceuticals (NASDAQ:ARIA): Involved in breast, prostate, lung, and other forms of cancer drugs, ARIA offers tremendous potential in the potentially lucrative cancer drug sphere. With a market cap of $980 million, a P/E of 10, and profit margin of 47.63%, ARIA has gained momentum and has considerable future prospects.

Biodel (NASDAQ:BIOD): Involved in diabetes and sporting a tiny market cap of $55.77 million, BIOD shows strength in its cash on hand ($22.79 million, or $0.84/share), strong insider holdings (31.59 percent), and strong up volume so far in 2011. With a short interest of 19.2 percent, this stock could be a good short squeeze opportunity if it continues to pick up momentum.

Neurocrine Biosciences (NASDAQ:NBIX): Involved in neurological and endocrine-related diseases and disorders and sporting a market cap of just under $400 million, NBIX recently found support near the $6.50 mark and the 200-day moving average. It also has $126.86 million in cash ($2.31/share). A rally could be underway.

Orexigen Therapeutics (NASDAQ:OREX): Involved in obesity drugs, and having been on a rollercoaster ride this past year as obesity drugs have faced tremendous difficulties via the FDA, OREX has a market cap of $134 million and is currently our favorite obesity drug play. The huge 40 percent short interest and very promising 44 percent insider holding make this both a short squeeze candidate and a comeback story, if obesity drugs can start finding some approval.

Vivus (NASDAQ:VVUS): Also an obesity drug maker, VVUS has a market cap of $516 million and $139 million in cash ($1.70/share). Not as impressive as OREX, however, VVUS only has 4.69% insider interest and 19.8% short interest.

Arena Pharmaceuticals (NASDAQ:ARNA): The third of the obesity drug makers we follow, ARNA has been hit the hardest hit over the past year. With a $175 million market cap and 35% short interest, it may prove to be a good comeback story. But the $125 million in debt requires some caution.

Supergen (SUPG): Involved in cancer drugs as well, SUPG has a $178 million market cap, 14.8 forward P/E ratio, and $115.25 million in cash ($1.91/share). With over 66% of its market cap in cash, and trading above both its 50- and 200-day moving averages, SUPG looks pretty good here.

Cleveland Biolabs (NASDAQ:CBLI): With a market cap of $210 million and trading above both its 50- and 200-day moving averages, CBLI offers big potential as a treatment source for cancer from radiation. And with the big radiation threat from the Japanese nuclear crisis, CBLI may benefit tremendously.

Cytori Therapeutics (NASDAQ:CYTX): Involved in regenerative medicines for repairing lost or damaged tissue and cell function, CYTX has a $397 million market cap and a 15.6% short interest.

Progenics Pharmaceuticals (NASDAQ:PGNX): Involved in prostate cancer and HIV drugs, PGNX offers tremendous value with a $211.5 million market cap and $48 million in cash ($1.44/share). It is trading above both its 50- and 200-day moving averages and may be on the verge of a run-up.

Arqule (NASDAQ:ARQL): Involved in cancer treatment (lung, pancreatic, and others) with a market cap of $360 million and $80.69 million cash ($1.52/share), as well as trading above both its 50- and 200-day moving averages, ARQL looks good with support at $6.

Array Biopharma (NASDAQ:ARRY): Involved in diabetes and cancer (breast, leukemia) treatment, and in collaborations with huge companies like Celgene (NASDAQ:CELG), Genentech and AstraZeneca (NYSE:AZN), this $170 million market cap company could one day make big headlines as well.

Sangamo Biosciences (NASDAQ:SGMO): Involved in gene regulation and modification, HIV/AIDS, spinal cord injury, stroke and brain injury, and parkinson's disease, SGMO offers tremendous potential upside at a $352 million market cap, 15.5% short interest, and trading above both its 50- and 200-day moving averages.

Sequenom (NASDAQ:SQNM): Involved in genetic analysis, this $475 million market cap company with $135 million in cash ($1.78/share) may provide some value too. It also has a 26% short interest.

Akorn (NASDAQ:AKRX): Involved in ophthalmology, anti-infective, and pain management, AKRX has a $544 million market cap, a strong insider interest of 33.48%, and is trading above both its 50- and 200-day moving averages. After a small correction, it may be at the beginning of a new run.

Affymax (OTCPK:AFFY): Treating anemia associated with chronic renal failure, AFFY has a $152 million market cap with $97 million in cash ($3.81/share). With over 60% of its stock price in cash and a 17% insider interest, this may be a good value play.

Affymetrix (NASDAQ:AFFX): Involved in genetic analysis, AFFX has a market cap of $351 million and a 16% short interest. Short-term support near $4.50.

Savient Pharmaceuticals (SVNT): After plummeting from over $23/share to $9.06/share in less than six months, SVNT is attempting to bounce back. Involved in the treatment of chronic gout, SVNT has a market cap of $733 million and a 22% short interest.

Cadence Pharmaceuticals (CADX): Involved in pain management with a market cap of $571 million, CADX may very well be setting up for a huge run. Trading above both its 50- and 200-day moving averages, showing large insider interest of 56%, and standing as a huge short-squeeze play with 82% short interest, CADX looks great here. Support near $7.

Momenta Pharmaceuticals (NASDAQ:MNTA): Involved in the making of generic versions of complex drug products, MNTA has a $740 million market cap, 12.78 P/E, $141.76 million in cash ($2.84/share), and a 24.9% short interest. It has seen some big drops over the past year, but this may be a decent price to buy in.

Somaxon Pharmaceuticals (NASDAQ:SOMX): Involved in the treatment of the central nervous system and insomnia, SOMX has a $99 million market cap and a relatively large $42.74 million in cash ($1.21/share) in comparison to its stock price. Add to that a 37.4% short interest, and SOMX is a great buy near its $2.50 support.

Keryx Biopharmaceuticals (NASDAQ:KERX): Involved in cancer and renal disease treatment, KERX has a $319 million market cap and is trading above both its 50- and 200-day moving averages. It has been one of the biggest gainers since 2009, when it traded as low as $0.09/share! It has been gaining some momentum so far this month.

Nektar Therapeutics (NASDAQ:NKTR): Involved in breast cancer treatment, pain management, anti-infective, and immunology, NKTR has plunged from $16/share to $8.50/share in six months. While its financials and technicals don't look so great, it has found decent support near $8.50. And with its involvement in a wide range of potentially lucrative drugs and treatments, this $1 billion company might provide some good profit potential.


Disclosure: I am long CEPH, AMRI, ARIA, BIOD, NBIX, OREX, SUPG, CBLI, ARRY.

Source: Future Biotech Superstars