Bio-Pharma Catalyst Trades And ASCO Movers: Making The Grade

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 |  Includes: ALTH, ARIA, ARNA, RGEN, SNSS
by: StockMatusow

Last Tuesday, May 8th 2012, I gave a quick review of some Bio Pharma catalyst trade picks I felt would be on the move. Let's see how my trades did and my own trade did as well. I will self grade my picks and add some additional commentary to each one of the picks.

Arena Pharma (ARNA) 5/7/12 pps: $2.72. Market cap: $496.40M

Catalyst trade factor mentioned last week: I have to mention Arena again as anticipation builds ahead of The Endocrinologic and Metabolic Drugs Advisory Committee meeting on May 10, 2012. I am leaning towards Lorcaserin receiving a favorable review this time around, albeit just barely. At the very least, If you decide to gamble and buy/hold Arena through all the catalysts and the drug receives a favorable review from the EMDAC committee, the stock might see a price over $6 a share.

5/15/12 pps: $6.61. Market cap: $1.21B

Grading my Arena call: A. I remarked I was leaning towards a favorable recommendation coming Arena's way on Lorcaserin with a stock price over $6 a share, which we can see did in fact occur with Arena's stock price and the advisory committes 18-4 vote in favor of recommending Lorcaserin for approval. Lorcaserin still faces a possible REM as Vivus's (NASDAQ:VVUS) weight loss drug Qnexa did, along with some certain scrutiny to come, but I am confident that Lorcaserin will get the green light from the full FDA regulatory decision makers this time around.

Repligen (RGEN) 5/7/12 pps: $4.94. Market cap: $151.78M

Repligen engages in the manufacture and supply of biologic products used to manufacture biologic drugs.

Catalyst trade factor mentioned last week: PDUFA date June 21, 2012 for SecreFlo for the improved detection of pancreatic duct abnormalities in patients with pancreatitis. The Gastrointestinal Drugs Advisory Committee will meet on May 31, 2012 to discuss the New Drug Application (NDA).

SecreFlo is a synthetic human secretin, designed to improve visualization of pancreatic duct abnormalities when used in combination with magnetic resonance imaging (MRI). Detailed assessment of the pancreatic ducts is important in the diagnosis and treatment of diseases such as acute and chronic pancreatitis.

5/15/12 pps: $4.69. Market cap: $144.10M

Grading the pick: F so far, but my pick might be a tad bit early, so I still expect a run up to occur, but maybe a week or 2 from now. I will review this pick again in 2 weeks and see if I still grade an F on RGEN.

Allos Therapeutics (ALTH) 5/7/12 pps: $1.81. Market cap: $193.59M

ASCO Catalyst trade factor mentioned last week: Phase 2 Data due June 3rd on Pralatrexate for the treatment of Advanced/metastatic relapsed transitional cell carcinoma of the urinary bladder.

Bladder cancer is the ninth most common type of cancer. According to the American Cancer Society, an estimated 68,810 new cases of bladder cancer were expected to be diagnosed in the U.S. in 2008. Transitional cell carcinoma, or TCC, is the most common form of bladder cancer, accounting for more than 90% of all bladder cancers. There are no approved agents for the treatment of advanced or metastatic relapsed TCC of the urinary bladder.

5/15/12 pps: $1.79. Market cap: $191.45M

Grading the pick: C. Allos, like Repligen, has not moved as of yet. I expect this to change with Allos in the next few days.

Ariad Pharma (ARIA) 5/7/12 pps: $16.09. Market cap: $2.56B

ASCO Catalyst trade factor mentioned last week: Phase 2 pivotal data on Ponatinib CML and Ph+ALL resistant or intolerant to dasatinib or nilotinib.

The primary target for ponatinib is BCR-ABL, an abnormal tyrosine kinase that is the hallmark of CML and Philadelphia chromosome positive (Ph+) acute lymphoblastic leukemia. Ponatinib was designed using ARIAD's computational and structure-based drug design platform to inhibit the enzymatic activity of BCR-ABL with very high potency and broad specificity. Ponatinib was intended to target not only native BCR-ABL, but also its isoforms that carry mutations that confer resistance to treatment with existing tyrosine kinase inhibitors, including especially the T315I mutation for which no effective therapy exists.

A favorable pivotal Ponatinib data could have a large effect on the Ariad stock price. Ariad has certainly been quite a story over the last 2-3 years, but can the run continue? Stay tuned.

5/15/12 pps: $17.01. Market cap: $2.7B

Grading the pick: A. Ariad continues to be one of the most talked about Bio Pharmas in the Oncological space. Ponatinib could be a huge money maker for Ariad if all the data continues to pan out. Personally, I am not so sure Ponatinib deserves all the hoop-la associated with it, but nonetheless, it has and continues to receive it.

My ASCO Catalyst pick and trade mentioned last week:

Sunesis Pharma (SNSS) 5/7/12 pps: $2.58, Market cap: $120.80M

Sunesis is expected to present Phase 3 data on Vosaroxin at ASCO on June 4th, 2012.

Vosaroxin is designed for the treatment of Acute myeloid leukemia AML. To combine with presenting at ASCO, Sunesis just announced on May 3rd that the European Commission has granted orphan drug designation to Vosaroxin. According to the CEO Daniel Swisher, there have been no new drugs to treat this disease in 30 years. If data for Vosaroxin holds up going through Phase III trials, the standard of care for patients who relapse from this form of Leukemia will change drastically.

With no competing drugs, the company estimates potential Vosaroxin sales, if approved, could range from $400-$600 million annually. I see Sunesis making a move to near $3 a share soon. Look for my feature article on Sunesis to be released today or tomorrow on SA and other sites. The revelation of phase 3 data points tend to move small cap bio pharma stocks higher than let's say, the revelation of phase 2 data points. This is why I am playing this one; notwithstanding, I think this stock has a great shot at being a multi bagger in the next 1 to 3 years, and Sunesis reminds me of Ariad a bit when Ariad was trading near the current Sunesis stock.

5/12/12 pps: $2.67. Market cap: $125.01M

Grading my pick on Sunesis: B. Sunesis has not quite taken off yet, but has had some moments of appearing to want to break over the $2.80 range, but then has met some resistance. I believe over all market conditions have slowed this pick down a tad, and I expect a break out move to over $3 to come by the end of this week.

Disclosure: I am long SNSS.