Catalyst trades in the biopharma sector can provide big profits if traded correctly. Some traders and investors who enjoy bringing more risk into play often times will hold through the catalyst event. While this does bring a lot more risk into play, the reward from engaging in this can be a massive one.
The bio-pharma companies listed below have near-term catalyst events associated with them. More often than not, these stocks see nice run-ups before the actual catalyst event takes place. Often times people in 'the know' begin to take aggressive positions in these stocks, which alerts more savvy traders to follow suite.
Traders and investors might also consider using option trading to hedge or lever their positions accordingly.
Progenics Pharmaceuticals (PGNX) 5/24/12 pps: $8.11. Market cap: $274.61M.
Progenics engages in the development and commercialization of therapeutic products to treat the unmet medical needs of patients with debilitating conditions and life-threatening diseases in the United States and internationally. Its primary programs focus on gastroenterology, oncology, and virology. The company offers Relistor (methylnaltrexone bromide) subcutaneous injection, a therapy for opioid-induced constipation.
7/27 PDUFA for RELISTOR; Salix (SLXP) will pay Progenics $40M on the approval milestone for RELISTOR for non-cancer pain. This should move the stock higher over coming weeks, possibly seeing $9.50 to $10 right before the PDUFA date. The Salix stock should also see a benefit from this potential catalyst as well.
In the most recent Phase III clinical trial involving the drug, 1034 patients were tested in a one year safety study of Relistor in non-malignant pain patients with OIC symptoms. In addition to strong toleration for the drug, it was shown that 34.1% of methylnaltrexone 12mg subcutaneous injections resulted in bowel movements within four hours. Subjective assessments were taken too, which showed statistically significant improvements from the baseline with regards to straining and the number of bowel movements along with relief.
Relistor Subcutaneous Injection is approved in the United States for the treatment of OIC in patients with advanced illness who are receiving palliative care, when response to laxative therapy has not been sufficient. This potential catalyst event revolved around the drug gaining eventual approval in an oral tablet form.
Relistor is also approved for use in over 50 countries worldwide, including the European Union, Canada, and Australia. In the 27 member states of the E.U., as well as Iceland, Norway and Liechtenstein, Relistor is approved for the treatment of opioid-induced constipation in advanced illness patients who are receiving palliative care when response to usual laxative therapy has not been sufficient. In Canada, the drug is approved for the treatment of opioid-induced constipation in patients with advanced illness, receiving palliative care. When response to laxatives has been insufficient, RELISTOR should be used as an adjunct therapy to induce a prompt bowel movement. Applications in additional countries are pending.
SheffStation (his nickname - handle), a well known successful biotech catalyst trader, has recently gone long on Progenics and thinks along the same lines as I do with Progenics; I am playing this one as well.
|% Held by Insiders:||5.45%|
|% Held by Institutions:||76.80%|
|Shares Short (as of Apr 30, 2012):||1.30M|
|Short Ratio (as of Apr 30, 2012):||9.30|
|Short % of Float (as of Apr 30, 2012):||5.90%|
Large institutional ownership and a decent short interest in a lower floating stock here provides a bit more price pop potential as well.
Run up target price opinion: $9:50 - $10.00.
Ziopharm Oncology (ZIOP) 5/21/12 pps: $5.11 Market cap: $400.99M.
The upcoming Picasso III Trial Results (due Q4 2012) - ZIOP's Picasso III trial is attempting to use Palifosfamide (an ifosfamide derivative) as a treatment in soft tissue sarcoma. Recent FDA actions in the disease indicate that progression free survival is now a viable approval metric for STS treatments.
I remarked in an article here on Seeking Alpha from this past Monday that I believed a short term pop to $5.05 a share would occur in 2 weeks or less. I got the opinion right as on Wednesday, May 23rd, the stock hit over my short term target price.
The stock saw a high yesterday of $5.24 a share, and I think another $0.50 cents might be in order here. I really want to do a feature article on Ziopharm, and should have one out next week. I traded the stock and met my short term sell target so I sold my shares. However, this does not mean I do not like the company and at some point will likely establish a longer term position in it.
Run up target price opinion: $5.50 - $5.75.
Spectrum Pharma (SPPI) 5/21/12 pps: $11.28. Market cap: $666.32M.
Spectrum engages in acquiring, developing, and commercializing prescription drug products primarily in the areas of hematology and oncology.
Potential Catalyst: Sat, Jun 2 1:15 PM - 5:15 PM ASCO presentation on Belinostat for advanced or recurrent thymic malignancies Phase 1/2 data in a General Poster Session.
Belinostat (PXD 101) is an HDAC inhibitor in late stage clinical development with more than 700+ patients treated to date. Belinostat is believed to inhibit enzymatic activity of class 1 and class 2 HDACs. Belinostat is also believed to increase in acetylation of both Listor and Listor proteins, resulting in cell cycle arrest, apoptosis and a decrease in cell proliferation.
|SPPI Shares Outstanding:||59.07M|
|% Held by Insiders:||12.72%|
|% Held by Institutions:||40.70%|
|Shares Short (as of Apr 30, 2012):||21.37M|
|Short Ratio (as of Apr 30, 2012):||7.10|
|Short % of Float (as of Apr 30, 2012):||43.40%|
|Shares Short (prior month):||18.32M|
Spectrum has a huge short position, and with any kind of positive data, the stock price could see a nice pop over $12 a share. Spectrum is one of my favorite bio pharmas because I like its business model and management. I have written a few articles on the company, and feel a stock price near $30 a share is certainly possible within 3 years time.
I am sure some of you are wondering why I keep mentioning Spectrum. Well, I like the CEO and I like the business model a lot. I have yet to trade a single share of the stock because I see Spectrum as a more solid long term investment than just simply a trade. Because I have most of my long term money tied up in Antares Pharma (AIS), I do not have 'the powder' to tie up and place a long term large bet on Spectrum. If I did have the money, I would definitely make a big bet on Spectrum. Spectrum represents what a growing bio pharma should; increasing revenues, yoy growth, aggressive marketing, and a focused long term business plan with focused proper cash management.
Run up target price opinion: $12.00 - $12.15.
Keryx Biopharma (KERX) 5/24/12 pps: $1.75. Market cap: $124.59M.
Keryx focuses on the acquisition, development, and commercialization of pharmaceutical products for the treatment cancer and renal disease.
Potential Catalyst: An abstract poster presentation at the upcoming 49th ERA-EDTA (European Renal Association - European Dialysis and Transplant Association) Congress, taking place May 24-27, 2012, in Paris, France.
The presentation will highlight the dose related increases in iron storage parameters as observed in prior clinical trials of Zerenex (ferric citrate).
Zerenex is Keryx's oral, ferric iron-based drug candidate for the treatment of hyperphosphatemia in end-stage renal disease patients on dialysis. The drug is currently in Phase 3 clinical development pursuant to a Special Protocol Assessment agreement with the FDA.
Run up target price opinion: $2.00 - $2.10.
Disclaimer: This article is intended for informational and entertainment use only and should not be construed as professional investment advice, but rather my opinions as a writer only. Always do you own complete due diligence before buying and selling any stock.
Disclosure: I am long PGNX.