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In the first part of this article I wrote about three companies that have promising studies against the cancer and chronic pain as well as the reasons to start a speculative position.

There are another three companies that are making some spectacular progress in their studies and some of them have also reached agreements on distribution of medical products. So in this article I will write about the reasons to take a speculative position in Dara Biosciences (NASDAQ:DARA), Savient Pharmaceuticals (SVNT) and AEterna Zentaris Inc (NASDAQ:AEZS).

1. DARA Biosciences Inc

It is a biopharmaceutical company, engages in the development and marketing of oncology treatment and supportive care pharmaceutical products in the United Sates. Its products include Soltamox for the treatment of breast cancer; Gemcitabine for first-line therapy for ovarian, breast, lung and pancreatic cancers; and other cancer support therapeutics, as well as generic sterile injectable cytotoxic products.

Pipeline Portfolio


(Click to enlarge) (SOURCE)

New catalyst

- On September 13, 2012, The Helsinn Group of Switzerland announced that it has entered into an exclusive agreement with DARA BioSciences Inc for U.S. commercial rights to Gelclair. Gelclair is an FDA-cleared product indicated for the treatment of oral mucositis. DARA plans to launch Gelclair in the first quarter of 2013. Oral mucositis is a painful inflammation and ulceration of the surface of the mouth and throat, which can result from a variety of cancer treatments. Gelclair is a topical gel used to coat and protect the oral cavity to reduce pain.

Next catalyst

- Dara plans to acquire formulations of "gold standard" generic injectable chemotherapy drugs.

- Dara plans to seeking partners for licensing of additional cytotoxics including oxaliplatin, docetaxel, and pemetrexed.

- Dara plans to partner with sterile injectable manufacturers who have the expertise and capability to provide a finished product from FDA inspected and approved facilities.

Fundamentals Analysis

Short interest

(SOURCE)

Analyst Research

(SOURCE)

- On 14 September 2012, Zacks upgraded a "Buy" on Dara Bio with price target of $2.50.

Jason Napodano, analyst of Zacks, wrote:

We find fair-value to be above $2.50 per share. We think DARA is starting to look very interesting for long-term investors. The company is well financed and both Soltamox and Bionect should be producing revenues by the end of the year. Gelclair should start contributing by the middle of 2013. Another product in gemcitabine will be under FDA review soon, and KRN5500 is nearing phase 2b funded by the NCI. We see the current market value as vastly under-valuing this opportunity. From here on, it's all execution.

Financials

The company reported the second-quarter financial results on August 13 with the following highlights:

Revenue $0
Net Income ($1.89MM)
Cash $8.34MM

Chart Analysis


(Click to enlarge)

- Rsi marks an overbought. The stock is in a bullish channel. The MACD marks an upward trend.

2. Savient Pharmaceuticals

Savient Pharmaceuticals, Inc. operates as a specialty biopharmaceutical company in the United States. It engages in developing and marketing KRYSTEXXA for the treatment of chronic gout in adult patients' refractory to conventional therapy. The company also sells and distributes branded and generic versions of oxandrolone, a drug used to promote weight gain following involuntary weight loss. Savient Pharmaceuticals Inc. sells its products through specialty and wholesale distributors.

This pharmaceutical company has agreements with major companies in the sector, such as Duke University, Mountain View Pharmaceuticals Inc and Watson Pharmaceuticals Inc (WPI).

Pipeline Portfolio


(Click to enlarge)

New Catalyst

-On July 23, 2012, Savient Pharmaceuticals announced that the Delaware Court of Chancery had issued a bench ruling granting both of Savient's motions in the lawsuit brought against the Company by Tang Capital Partners, LP and certain other holders of Savient's convertible notes. The Court of Chancery decided that the plaintiff noteholders do not have standing to bring an action to appoint a receiver for Savient and that an event of default has not occurred under Savient's convertible notes. The Court has not yet come to a conclusion on the plaintiff's claims for breach of fiduciary duty and waste. Savient continues to believe that all outstanding claims alleged by the plaintiffs are without merit, and intends to vigorously defend this lawsuit to its completion. The Court of Chancery's decision is subject to appeal by the plaintiffs. In addition, Savient's claim for damages against Tang Capital remains outstanding.

Next Catalyst

- Savient's claim for damages against Tang Capital.

- A possible sequential increase in sales of its products.

Fundamentals Analysis

Short interest

(SOURCE)

Analyst Research

(SOURCE)

Financials

The company reported the second-quarter financial results on August 8 with the following highlights:

Revenue $4.62MM
Net Income ($16.37MM)
Cash $92.46MM

Chart Analysis


(Click to enlarge)

- Rsi marks an overbought. The MACD marks an upward trend. The stock is in a bullish channel.

3. AEterna Zentaris Inc.

It is a biopharmaceutical company, engages in the discovery, development, and marketing of drugs for oncology and endocrine therapy primarily in the United States, Switzerland, and Japan. It provides Cetrotide, a luteinizing hormone-releasing hormone (LHRH) antagonist treatment for in vitro fertilization. The company's’ product pipeline includes Perifosine, an oral anticancer treatment that inhibits Akt activation in the PI3K pathway, which is in Phase III studies for the treatment of colorectal cancer and multiple myeloma, as well as in Phase II studies for the treatment of other cancers; and AEZS-108, a targeted cytotoxic peptide conjugate in Phase II studies for the treatment of endometrial, ovarian, prostate, and bladder cancer. It is also developing AEZS-130, an oral diagnostic test in Phase III trial for adult growth hormone deficiency, as well as in Phase I trial for the treatment of severe chronic diseases, such as cancer induced cachexia; and AEZS-112, which is in Phase I clinical trial for the treatment of solid tumors. It has license, research, and development agreements with Yakult Honsha (OTC:YKLTF) (Japan), Handok (Korea), Hikma (OTC:HKMPF) (Middle East and North Africa), Merck Serono (OTCPK:MKGAY) and Nippon Kayaku / Shionogi (OTC:NPKYF) (Japan).

Pipeline Portfolio


(Click to enlarge)

New Catalyst

- On July 24, 2012, AEterna Zentaris Inc announced that it had filed a request with the United States Food and Drug Administration (FDA) for Fast Track designation for its oral ghrelin agonist, AEZS-130, as a diagnostic test for adult growth hormone deficiency (OTC:AGHD). The request is part of the Company's New Drug Application ("NDA") strategy for AEZS-130 to advance the product towards regulatory approval as efficiently as possible.

Next Catalyst

- Perifosine, Phase III in multiple myeloma: Predefined interim analysis in Q1-2013.

- AEZS-108:

  • SPA filing Phase III in endometrial cancer.
  • Initiate patient recruitment in triple-negative breast cancer Phase II study.
  • Results on ongoing Phase II study in castration- and taxane-resistant prostate cancer.

- AEZS-130:

  • AEZS-130 diagnostic test in AGHD
  1. ‒ Outcome of Fast-track and rolling submission requests to FDA.
  2. ‒ File NDA as diagnostic test for AGHD in the U.S.
  • Results of Phase IIA study in cancer-induced cachexia.

- AEZS-120:

  • File Clinical Trial Application (CTA): Phase I in prostate cancer.

Fundamentals Analysis

Short interest

(SOURCE)

Analyst Research

(SOURCE)

Financials

The company reported the second-quarter financial results on August 14 with the following highlights:

Revenue $7.5MM
Net Income $4.5MM
Cash $39.8MM

Chart Analysis


(Click to enlarge)

- The MACD marks an upward trend. RSI is in a good position. The stock is in a bullish channel.

*Chart data sourced from stockcharts, all other data sourced from Nasdaq.com as well as the web of the previously mentioned company.

Source: 3 Best Biotech Stocks For This Week (Part II)