As I have reiterated before, the best way to trade bio-pharmas are on upcoming catalysts. Get in early before the run up, then sell right before the FDA and/or advisory committee renders its final decision whether to approve/recommend a drug or not. If you are solvent enough to ride out possible dips below your average price, buying on those dips can be a good proposition as well, in my opinion.
Xenoport (XNPT) focuses on developing and commercializing internally discovered product candidates that utilize the body's natural nutrient transport mechanisms to enhance the therapeutic benefits of drugs.
Drug approval date upcoming: PDUFA 6/9/12 for sNDA of Horizant for post-herpetic neuralgia (PHN).
Horizant utilizes naturally-occurring, high-capacity nutrient transporters in the gastrointestinal tract to generate active, efficient absorption into the body. Once absorbed, gabapentin enacarbil is rapidly converted into gabapentin, which binds to specific proteins that regulate neuronal activity, and is thereby thought to inhibit unnecessary excitatory neurological activity. Neuropathic pain is pain that results from damage to nerves. The damage may result from a variety of causes, including injury or illnesses such as diabetes, HIV and shingles.
In other words, Horizant is used to treat pain.
My opinion on the odds for approval: Better than 60/40. Xeno is partnered with GlaxoSmithKline (GSK) for The United States market, and the drug is already approved and sold in Japan.
Run up potential: My opinion is about $1.50 higher than it currently sells for. Price per share as of this writing: $4.51. Market Cap: $160.68M. Institutional ownership: 87%; bullish.
Protalix BioTherapeutics (PLX) focuses on the development and commercialization of recombinant therapeutic proteins based on its proprietary ProCellEx protein expression system in the United States.
Drug approval date upcoming: PDUFA 5/1/12 of Taligluerase for Gaucher disease.
Taligluerase is a plant cell-expressed recombinant glucocerebrosidase enzyme for the potential treatment of Gaucher disease. Protalix is partnered with Pfizer (PFE) for the exclusive worldwide commercialization of taliglucerase alfa in all territories, except in Israel, where Protalix has retained exclusive rights. Protalix completed the pivotal Phase 3 trial, and patients from the pivotal study were enrolled into an extension study, with some patients being treated for greater than three years. Taliglucerase alfa has been granted orphan drug designation by both the FDA and the European Medicines Agency.
My opinion on the odds for approval: Better than 70/30. The FDA is already allowing Protalix and Pfizer to treat Gaucher's patients under a compassionate use program, so the drug's efficacy and safety should not be an issue standing in the way for approval.
Run up potential: My opinion is about $1 higher than it currently sells for. Price per share as of this writing: $6.60. Market Cap: $599.38M. Institutional ownership: 19.60%; bearish.
Arena Pharma (ARNA) engages in discovering, developing and commercializing oral drugs in the therapeutic areas of cardiovascular, central nervous system, inflammatory and metabolic diseases.
Drug advisory date upcoming: Endocrinologic and Metabolic Drugs Advisory Committee will meet on May 10, 2012, to discuss the safety and efficacy of new drug application (NDA) 22-529 (lorcaserin hydrochloride) tablets.
Lorcaserin is an investigational drug candidate intended for weight management, including weight loss and maintenance of weight loss, in patients who are obese (BMI ≥30) or patients who are overweight (BMI ≥27) and have at least one weight-related co-morbid condition. Lorcaserin is a new chemical entity that is believed to act as a selective serotonin 2C receptor. The serotonin 2C receptor is expressed in the brain, including the hypothalamus, an area believed to be involved in the control of appetite and metabolism.
My opinion on the odds for Advisory recommendation: Better than 80/20.
Vivus (VVUS) An advisory Committee vote on February 22nd recommended that Vivus's weight loss drug, Qnexa, be approved. Vivus stock soared 125% over three trading days. Arena's Locaserin should be given the same recommendation as in my opinion it is the safer of the two drugs. Although in the past I have been against these types of drugs, I have softened my stance a bit on them.
Run up potential: My opinion is about $0.50 higher than it currently sells for. The stock has basically doubled lately from a massive run-up. I do believe it has legs left, but there might be better plays out there.
Price per share as of this writing: $3.05. Market Cap: $550.29M Institutional ownership: 28.10%; somewhat bullish.
Out of these catalysts above, it is my opinion Xenoport has the largest upside potential run-up wise. It has been oversold from a 52 week range of $3.46 - $11.34, so it is trading much closer to its 52 week low.
Disclaimer: This article is intended for informational and entertainment use only and should not be construed as professional investment advice. It is my personal opinions only. Always do you own complete due diligence before buying and selling any stock.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.