Healthcare Stocks On The Move In A Difficult Market

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 |  Includes: AEGR, ARNA, DSM, GHDX, GILD, HUM, IONS, OMER, OSIR, PCYC, QLTI, RDSMY, VRTX
by: StockPandit

May month is always a difficult month in stock market and May 2012 is not an exception. The DOW and NASDAQ logged the worst monthly performance since May 2010. NASDAQ composite index fell 10.02 points to 2,827.34, and had its worst month in the past two years. Fears about US economy, job reports, eurozone debt crisis with Spain and Greece are some of the reasons for the negative performance in May 2012. However, there are some stocks that performed well during this month in the Healthcare sector.

In this article, I will cover those top performers in Healthcare sector during the month May 2012. These stocks are screened based on the following criteria:

  • Security Type: Common Stock
  • Market Cap: Greater than 200 million
  • Stock Price: Greater than $1.00
  • MTD Performance (May 1 to May 31): Greater than 13%

The following chart provides the top performers of Healthcare stocks for the month May 2012:

(click to enlarge)Click to enlarge

1. Arena Pharmaceuticals, Inc (ARNA): Arena Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, engages in discovering, developing, and commercializing oral drugs that target G protein-coupled receptors in the therapeutic areas of cardiovascular, central nervous system, inflammatory, and metabolic diseases.

Arena has a market cap of $1.17B. Arena is currently trading around $6.40 with a 52 week range of $1.23 to $7.01. The stock has 174.74% price performance for the month May 2012.

Analysis: Arena stocks soared after a panel of experts for the U.S. Food and Drug Administration (FDA) recommended the company's obesity drug, lorcaserin for approval. US FDA has assigned a new PDUFA target date of June 27, 2012 and if the drug is approved, the stock is expected to soar to set new 52-week high.

2. Vertex Pharmaceuticals Inc (VRTX): Vertex Pharmaceuticals Incorporated engages in discovering, developing, manufacturing, and commercializing small molecule drugs for the treatment of serious diseases worldwide.

Vertex has a market cap of $12.57B. Vertex is currently trading around $59.56 with a 52 week range of $26.50 to $66.10. The stock has 56.03% price performance for the month May 2012.

Analysis: On May 7, 2012, Vertex Pharmaceuticals announced an interim analysis of data from an ongoing Phase 2 study of VX-809 and KALYDECO (ivacaftor) that showed significant improvements in lung function (FEV1) among adults with cystic fibrosis (NYSE:CF) who have two copies (homozygous) of the most common mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene, F508del. Following this news, Vertex stock went up from $37.41 to $64.18 with two days. Vertex has very good pipeline and place in the Hepatitis C and non-VX-809 CF markets. They have variety of drugs in pre-clinical trials as well as revenue generation drugs.

3. Kensey Nash Corporation (KNSY): Kensey Nash Corporation, a medical device company, engages in the field of regenerative medicine products and technologies to help repair damaged or diseased tissues.

Kensey Nash has a market cap of $333.16M. Kensey Nash is currently trading around $38.42 with a 52 week range of $18.17 to $38.69. The stock has 35.23% price performance for the month May 2012.

Analysis: On May 3, 2012, Kensey Nash announced that it has entered into a definitive agreement with Royal DSM (NYSE:DSM) , under which DSM has agreed to acquire all of the common stock of Kensey Nash through a cash tender offer, followed by a merger with a subsidiary of DSM, for $38.50 per share in cash.

4. ISIS Pharmaceuticals, Inc (ISIS): Isis Pharmaceuticals, Inc engages in the discovery and development of antisense drugs using antisense drug discovery platform. The company's antisense drug development programs focus on treating cardiovascular, metabolic, cancer, and severe neurodegenerative diseases.

On May 8, 2012, Isis Pharmaceuticals announced that their partners at Genzyme submitted the KYNAMRO new drug application (NDA) to the FDA and Isis Pharmaceuticals will earn a $25 million milestone from Genzyme following FDA acceptance for the NDA submission of KYNAMRO for patients with homozygous FH. In addition, the European regulatory review is proceeding as planned, and Genzyme is actively preparing to launch KYNAMRO. Also, Needham initiated BUY rating for Isis Pharmaceuticals.

ISIS Pharmaceuticals has a market cap of $973.79M. ISIS Pharmaceuticals is currently trading around $9.72 with a 52 week range of $6.25 to $10.26. The stock has 23.63% price performance for the month May 2012.

5. Aegerion Pharmaceuticals, Inc (AEGR): Aegerion Pharmaceuticals, Inc., a development stage biopharmaceutical company, engages in the development and commercialization of novel therapeutics to treat debilitating and fatal rare diseases. The company focuses on therapeutics to treat severe inherited lipid disorders.

Aegerion Pharmaceuticals has a market cap of $309.92M. Aegerion Pharmaceuticals is currently trading around $14.41 with a 52 week range of $11.75 to $18.28. The stock has 22.17% price performance for the month May 2012.

Analysis: On April 30, 2012, Aegerion Pharmaceuticals announced that the U.S. Food and Drug Administration (FDA) has accepted its New Drug Application (NDA) for lomitapide, a once-daily, oral treatment for Homozygous Familial Hypercholesterolemia (HoFH), for review. Aegerion is seeking authorization to market lomitapide as an adjunct to a low-fat diet and other lipid-lowering therapies to reduce cholesterol in patients with HoFH. Lomitapide holds orphan drug designation for the treatment of HoFH in the United States, and for the treatment of familial chylomicronemia (NYSE:FC) in the U.S. and EU. On May 22, 2012, Needham & Company AEGR)+at+Buy%3B+Looking+For+Approval+of+Oral+Orphan+Cardiac+Disease+Treatment/7460427.html" rel="nofollow">initiated coverage on Aegerion Pharmaceuticals with a BUY rating and set the price target as $24.00. If US FDA or EMA approve lomitapide, the stock price is expected to go north by end of this year or fby 1H 2013.

6. Osiris Therapeutics, Inc (OSIR): Osiris Therapeutics, Inc., a stem cell company, focuses on the development and marketing of therapeutic products to treat various medical conditions in the inflammatory, cardiovascular, orthopedic, and wound healing markets. It operates in two segments, Therapeutics and Biosurgery.

Osiris Therapeutics has a market cap of $200.40M. Osiris Therapeutics is currently trading around $6.1 with a 52 week range of $4.12 to $8.39. The stock has 19.21% price performance for the month May 2012.

Analysis: On May 17, 2012, Osiris announced that it has received market authorization from Health Canada to market its stem cell therapy Prochymal (remestemcel-L), for the treatment of acute graft-vs-host disease (GvHD) in children. The historic decision marks the world's first regulatory approval of a manufactured stem cell product and the first therapy approved for GvHD - a devastating complication of bone marrow transplantation that kills up to 80 percent of children affected, many within just weeks of diagnosis. On May 29, 2012, Osiris announced that it has received transitional pass-through status from the Center for Medicare & Medicaid Services, with C-Codes being designated for Grafix.

7. Genomic Health, Inc (GHDX): Genomic Health, Inc., a molecular diagnostics company, engages in the development and commercialization of genomic-based clinical laboratory services that analyze the underlying biology of cancer allowing physicians and patients to make individualized treatment decisions.

Genomic Health has a market cap of $988.12M. Genomic Health is currently trading around $32.88 with a 52 week range of $19.00 to $35.46. The stock has 17.9% price performance for the month May 2012.

Analysis: On May 16, 2012, Genomic Health announced that results from 18 separate studies covering breast, colon and prostate cancers will be presented at the American Society of Clinical Oncology (OTC:ASCO) 2012 Annual Meeting, reflecting the company's ongoing commitment to the research, development and delivery of innovative diagnostic tests to help individualize cancer treatment decisions.

8. Metropolitan Health Networks, Inc (MDF): Metropolitan Health Networks, Inc., through its subsidiaries, engages in the operation of provider services network (PSN) in the United States. Its PSN provides and manages the healthcare services to Medicare advantage and Medicaid beneficiaries in Florida.

Metropolitan Health Networks has a market cap of $367.36M. Metropolitan Health Networks is currently trading around $8.32 with a 52 week range of $4.10 to $9.69. The stock has 16.3% price performance for the month May 2012.

Analysis: On May 8, 2012, Metropolitan Health Networks reported the financial results for their first quarter ended March 31, 2012 and achieved significant increases in almost all aspects of its financial results as a result of the Continucare acquisition in the fourth quarter of 2011. After the earnings news, the stock price went up from $7.51 to $8.58 within 2 days.

9. Omeros Corporation (OMER): Omeros Corporation, a clinical-stage biopharmaceutical company, engages in discovering, developing, and commercializing products targeting inflammation, coagulopathies, and disorders of the central nervous system.

Omeros has a market cap of $228.78M. Omeros is currently trading around $10.19 with a 52 week range of $3.16 to $10.88. The stock has 15.71% price performance for the month May 2012.

Analysis: On May 8, 2012, Maxim Group initiated a BUY rating and set the price target as $23.00 which is significantly higher than the current stock price. Omeros has competed enrollment for the Phase III OMS103HP trial and the data is expected in second half of 2012. Omeros expected to provide two Phase III trials in second half of 2012, and its recent news on GPCR (orphan G protein-coupled receptors), Omeros has huge upside potential in second of half of 2012.

10. QLT Inc (QLTI): QLT Inc., a biotechnology company, engages in the development and commercialization of ocular products that address the unmet medical needs of patients and clinicians.

QLT has a market cap of $371.46M. QLT is currently trading around $7.57 with a 52 week range of $5.35 to $8.05. The stock has 14.26% price performance for the month May 2012.

Analysis: On May 23, 2012, QLT announced that it has been notified that NB Public Equity Komplementar ApS ("Nordic Biotech") has deposited with Computershare Investor Services Inc, the Company's proxy administrator, a legal proxy representing an aggregate of approximately 7.4 million common shares of QLT that are instructed to be voted at the Company's annual general meeting of shareholders on May 24, 2012 in favour of a dissident slate of directors nominated by Nordic Biotech.

11. Pharmacyclics, Inc (PCYC): Pharmacyclics, Inc. operates as a clinical-stage bio-pharmaceutical company focusing on discovering, developing, and commercializing small-molecule drugs for the treatment of cancer and immune mediated diseases.

Pharmacyclics has a market cap of $2.10B. Pharmacyclics is currently trading around $30.46 with a 52 week range of $6.84 to $33.24. The stock has 14.01% price performance for the month May 2012.

Analysis: On May 17, 2012, Pharmacyclics announced that clinical abstracts on Bruton's Tyrosine Kinase inhibitor, ibrutinib (formerly, PCI-32765) have been selected for oral presentations at the 48th Annual Meeting of the American Society of Clinical Oncology (OTC:ASCO), June 1-5, 2012 in Chicago, IL. On May 22, 2012, Pharmacyclics announced that clinical abstracts on Bruton's Tyrosine Kinase inhibitor, ibrutinib have been selected for oral presentations at the 17th Congress of the European Hematology Association (EHA), June 14-17, 2012 in Amsterdam, The Netherlands. The impressive efficiency and safety from ibrutinib clinical trials is a positive sign for this stock.

12. YM BioSciences Inc (YMI): YM BioSciences Inc., a drug development company, engages in advancing three clinical-stage hematology and cancer-related products.

YM BioSciences has a market cap of $228.75M. YM BioSciences is currently trading around $1.96 with a 52 week range of $1.03 to $3.77. The stock has 13.22% price performance for the month May 2012.

Analysis: On May 11, 2012, YM BioSciences reported operational and financial results for its third quarter of fiscal 2012, ended March 31, 2012 and provided updates on CYT387 in myelofibrosis. On May 10, 2012, Piper Jaffray initiated an OVERWEIGHT rating on the stock.

Sources: Some of the data is taken from Google Finance, Fidelity and investor sites.

I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AEGR, ARNA, GHDX, ISIS, KNSY, MDF, OMER, OSIR, PCYC, QLTI, VRTX, YMI over the next 72 hours.