Normally I post my daily dose of three biotech/pharma stock movers only to Bio-Wire.com as a treat to the readers, but Wednesday's trading brought some interesting factors that should be discussed a little more. First, check out the recaps of what happened yesterday (original post here):
3 Superactive Bio Stocks (October 3, 2012) Bio-Wire
1.) Sarepta Therapeutics (SRPT) - We're starting this list with a bang - Sarepta is on fire (in a good way). On October 3rd, SRPT jumped an unbelievable 199.7% by the closing bell (tripling shareholder wealth), and retreat only 3.4% in after-hours trading. The huge influx of investor capital is based on strong Phase IIb results for the compound Eteplirsen in the treatment of Duchenne Muscular Dystrophy. This incurable disease affects 1/3600 young males, causing irreversible muscle degeneration and eventual death. Eteplirsen represents a big jump relative to existing steroid therapies according to clinical trials conducted so far.
From CNN Money's copy of the company's release:
"These data represent a significant milestone and a defining moment of progress and hope for patients with DMD and their families, as well as for those of us in the scientific community who have been pursuing potential treatments for this devastating and deadly disease for decades," said Jerry Mendell, M.D., Director of the Centers for Gene Therapy and Muscular Dystrophy at Nationwide Children's Hospital and principal investigator of the Phase IIb study.
2.) Amarin Corporation (AMRN) - Amarin, a closely-watched company most are expecting to become a superstar in the world of cardiovascular treatment, was hit hard (again). The 4.4% drop on October 3rd follows a painful 5.9% hit on Tuesday (October 2nd). Why? This is all happening because the FDA is remaining tight-lipped about the exclusivity of their flagship product Vascepa.
Vascepa received FDA approval for the treatment of hypertriglyceridemia for patients with measured triglyceride levels >500mg/dL. Most of Amarin's value is based on the next FDA approval for lower levels of triglycerides (and other prospects), but indecision by the FDA is a direct threat to all of Amarin's future prospects.
3.) Arena Pharmaceuticals (ARNA) - Arena, arguably the favorite biotech bet on the fledgling prescription obesity drug market, enjoyed a 5.6% rally. This move was mostly an extension of the rally started at the end of September, which was due to overselling of ARNA shares in the short-term. ARNA performance has been weak since FDA approval of Belviq (lorcaserin) in part due to apprehension over the DEA's review and classification of the drug as "scheduled".
There is also major competition from Vivus Pharmaceuticals (VVUS). Their obesity drug Qsymia (phentermine and extended-release topiramate) entered the market in September, and threatens to take a major slice of the pie before Belviq (lorcaserin) enters. Future competition is also coming from Orexigen Therapeutics (OREX), with the weight loss drug Contrave (naltrexone and bupropion)
Since we've already watched Amarin stock undergo a lot of drama in reaction to its patent issues earlier in the year, it's surprising to nobody that any apprehension over the FDA's apparent indecision about Vascepa's NCE status. We know the stuff works, and has huge potential.
Now it's just a matter of luck in the legal system, and some strong marketing strategy that could knock out lesser competition like Lovaza - the triglyceride drug marketed by GlaxoSmithKline (GSK). Amarin seems to undergo a lot of buyout speculation too, which actually makes sense. I think this is a good long-term hold. Since shares have pulled back on fuzzy trading, it's a better time to buy more.
Arena is also another media/trader favorite, since it's considered (more like debated) to be the best play on the reborn prescription obesity drug market. Like stated earlier, there is competition. Still, it looks like faith in ARNA is returning yet again. The stock is moving up on pretty strong volume. Short the rally? I don't think it's wise. Chase the rally? Maybe, but I want to see Vivus' sales first.
Sarepta's move was by far the most interesting. This tripling of the stock price clearly needs more than a simple recap, and I'll be checking it out in the near future. Their phase IIb data currently suggests that etepliserin is going to make it to the MD market and do extremely well. Analyst upgrades will help it go further, and did I mention short-squeezing? There's about 3.2 million shares that have lost the bears about $95 million in one trading session. Owch.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.