Seeking Alpha
Long/short equity, value, special situations, growth
Profile| Send Message|
( followers)  

Bio-pharma stocks have perhaps the most short-term trading opportunities of any sector. This is an opportunity and a problem as you often can not hold a bio-pharma stock very long without experiencing a catalyst. We need to stay on top of our bio-pharma stocks, here are six items you may wish to play this week in the sector:

1) Amarin (NASDAQ:AMRN) - Columnist Adam Feuerstein has a history of being good for a bio-pharma bounce when he questions a company on old information like he did last week. Looks like some people got caught short and got wind that AMRN will run up to the July 26th decision on fish-oil pill AMR101. I have not gotten a scoop on its approval but I am hearing that it should run up into the decision.

2) Antares (Nasdaq:ATRS) - Humongous potential here with the idea of delivering drugs with injections and gels rather than pills. This has shown advantages in user preference, economics (less drug is needed), accuracy of dose (the digestive system does not destroy it), and less liver damage. The company is making money now or close to it, has diverse products (hormone delivery, arthritis, contraception...), and long term nestragel and male contraceptives could be really huge (women preferred their contraceptive gel to a pill 3-1).

It has run a lot but there are two possible near term catalysts that make me recommend it here. They are likely about to breach $5 and after a couple weeks the mutual funds will be able to move in, but also there is arthritis drug Vibex MTX. They were originally scheduled to file application this Summer but pushed it back to the end of the year. Management has a history of building in extra time and under-promising so there is reason to believe they will file for Vibex MTX by the original time of the end of the Summer.

3) Avon (NYSE:AVP) - Looks likely to buy Obagi (Nasdaq:OMPI) which could be seen as a rescue of Avon's fate and I believe it will run up this week. Same deal here as with the AMRN slams, S&P came out at the end of the week downgrading Avon to a sell based on...global economic concerns. This on the same day as an MSN Money syndicated columnist slammed it based upon...old news. I think shorts got wind of the OMPI buyout and reached out to their friends at S&P and MSN.

4) Coronado Biosciences (Nasdaq:CNDO) - Still have diligence to do on this one but it is too interesting not to mention with its pro-parasitics. They are giving people worms to cure auto-immune diseases and the results are really interesting. "A biologic comprising of the microscopic eggs of the porcine whipworm, for the treatment of autoimmune diseases, such as Crohn's disease (Crohn's), ulcerative colitis (UC) and multiple sclerosis (MS)" (Source: Google Finance)

5) Invivo Therapeutics (OTCQB:NVIV) - CEO Frank Reynolds is talking about a Nobel Prize as he is "curing paralysis." Caution here as he is rubbing people the wrong way I'm hearing and that is my own opinion after watching his media tours. There is skepticism on the claims that this has worked in monkeys, a lack of justification for not uplisting to Nasdaq, and I am told Reynolds was less than up-front when someone I know asked about warrants and capital structure.

6) Vivus (Nasdaq:VVUS) - Faces an FDA approval decision on Qnexa by July 17, rumor I am hearing is it may be approved based upon pressure from above even though it perhaps has risks that should keep it from approval. This should hurt Arena badly as its weight loss drug will likely lose significant market share.

Disclosure: I am long OMPI.

Additional disclosure: May get long ATRS, AMRN

Source: 6 Bio-Pharma Plays For The Week