Three Biotechs Hitting New 52-Week Highs

Osiris Therapeutics Inc.

Osiris Therapeutics (OSIR) is a biotech based in Maryland which specializes in bone marrow stem cell products that treat inflammatory, orthopedic, and cardiovascular areas of medicine.

On Tuesday, September 23, OSIR announced that it enrolled 62 patients in the Phase 2 trial to treat pulmonary disease through its Prochymal product formulated from adult mesenchymal stem cells.

On Thursday, August 7, OSIR reported a Q2 loss of $0.48 per share or $15.4 million on $2.5 million in revenue vs. a loss of $0.37 per share or $10.5 million a year ago. Analysts expected a loss of $0.51 per share on $1.6 million, beating both earnings estimates and revenue targets. If a stock makes new highs, it doesn’t mean the company is profitable.

The most recent analyst action came from Jefferies & Co which downgraded OSIR to “Underperform” from “Hold” and set a target price of $11 on August 1. The close as of Tuesday, September 23 was $19.12.

Technically, OSIR looks like it will go higher but on a pullback. $17 is the target pullback level and the 50-day MA is the guide. This is a common “stair-step” pattern which is characterized by long consolidation periods (1-2 months) with forceful breakouts.

This is a low volume stock and should be traded with caution.

NPS Pharmaceuticals Inc.

NPS Pharmaceuticals (NPSP) is a biopharma based in New Jersey that specializes in gastrointestinal and endocrine disorders.

On Tuesday, September 16, NPSP reported positive interim data from the hypoparathyroidism Phase 2 study. GATTEX is currently in Phase 3 development, NPSP558 is in Phase 2 development. PREOS completed a Phase 3 study and NPSP156 is still in its preclinical stage.

The company reported positive earnings in 12 out of the last 13 quarters. No analyst actions were taken in 2008, even though four firms cover NPSP (Credit Suisse, Goldman Sachs, Jefferies & Co, Lehman Brothers. Unknown if LEH still covers the stock.)

I don’t expect either GATTEX or NPSP558 to be commercialized until 2011. Therefore, there are few short to intermediate-term catalysts to prop this stock up.

The stock is up 115.9% year-to-date, outperforming nearly all peers in the pharmaceutical sector.

Technically, NPSP may be forming a “bump-and-run” reversal. Any penetration of the support line below on heavy volume indicates a major trend reversal. NPSP may go higher, but it’s too extended for any short- or intermediate-term long position.

Aceto Corp.

Aceto Corp. (ACET) is a multi-segmented business based in New York that specializes in heath sciences, agricultural bio drugs, chemicals, and crop protection. And distributes over 1,000 pharmaceuticals and chemicals throughout the world.

On Friday, September 5, ACET reported Q4 earnings of $0.32 per share or $8 million on $104.7 million vs. $0.17 per share or $4.2 million on $87.2 million a year ago. Profit grew 90% and revenue grew 20% for the quarter.

The health sciences unit grew 34.9% and the crop protection unit grew 19.5% helped by the global demand in the agricultural/fertilizer and animal testing industries.

ACET is covered by 2 firms (Buckingham Research Group and Sidoti & Co. Neither has issued a rating since 2003.

ACET’s chart is “choppy” and numerous support levels are violated during the uptrend making ACET a difficult short-term trade. Instead, ACET should be considered for an intermediate trade. A long position can be placed around $9 and a short position can be placed around $8.50 if such opportunities exist.

Disclosure: None at this time.
 

Comments

[kharrin49:]

Osiris.. Owning this stock in my long term portfolio I love seeing it hitting new 52 week highs.However I do not see anything in the news or up coming events that would call for this type of movement. It does remind me however of last year when it appeared that Osiris stock was being manipulated by market makers. Is this what is happenning ? I do not know enough about how the system works but I do recall seeing this stock swing between $14.00 and $21.00 on little volume with little explanation. Is this a replay of that movement.? Sure looks like it..

2008 Sep 25 08:49 AM

[Roly:]

The latest analyst report is from 14th Aug. LEERINK SWANN and the price target is 24$ to 27$.
Mr. John C. Lee please do mention the positive analysis too.
In my opinion Osiris is a big bet on stemcells and if you visit the website and do your own research you really can get excited, for me this is a stock that could go up to 50$ or more. See osiris.com and read some press releases e.g. 10.14.05.
And Karrin49, if you have bought 1000@14, why don't you sell 700@20 and wait and see.
Roly

2008 Sep 25 02:22 PM

[John C. Lee:]

Roly - Osiris is about 10 mins away from my house, so they better do well. Thanks for the update. I wanted to point out how very wrong Jefferies' estimate was.

Kharrin - Roly's right, nothing wrong with taking some profit. A lot of stocks are manipulated my mm's. you just gotta live with it.

2008 Sep 25 03:48 PM

[brucec30:]

Having owned this since my intro to the market (9/2006) I have watched it go up then fall onto its face.
I do have confidence. I feel what ever happens with stem cell research Osiris has a great deal of experience & knowledge. This should pay off in the end, just give it some time.
I expect to wait it out, but I don't want to give it all up thinking of what is in the future.
B

2008 Sep 25 07:38 PM

[brucec30:]

sorry, didn't mention I was talking about OSIR.

2008 Sep 25 07:39 PM