Questcor Pharmaceuticals (QCOR) was one of the most heavily shorted stocks on the NASDAQ, according to the most recent data set from May 31st 2013, with 22.15M shares short out of a float of 53.6M share (41%). Investors should also note that this was after a significant decline in short interest throughout the month of May, as the April 30, 2013 data show 27.15M shares short QCOR.

QCOR trading has been very erratic in the last two months, although it has clearly favored the bulls, especially after last week's rally in reaction to the acquisition of a competing product. We will discuss this later in the note.

We think that the recent move towards the upside was justified, due to Questcor's most recent developments. The bearish scenarios that inspired many short sellers to attack the stock have not (and may not) play out, which provides some potential for stability

This morning, Northwest Biotherapeutics (NWBO) announced the initiation of a 60-patient Phase I/II trial at the MD Anderson Cancer Center for the newest version of their personalized cancer immunotherapy DCVax-Direct - here is the press release (link). The trial will consist of a standard dose escalation phase, which should determine the optimal regimen for the Phase II portion of the trial, which will examine the efficacy of the therapy with a RECIST-measured tumor shrinkage endpoint. Particularly interesting about the Phase II portion is that patients will be arranged in cohorts, depending on their type of cancer. This should provide some clues as to which types of cancer DCVax works best in.

As mentioned by company management, there are few concerns about the safety profile of the therapy, since the DCVax platform uses a patient's own cells. This bodes well for the future approval process of the therapy,

The recent doubling of shares of Clovis Oncology (CLVS) after the company's presentation at ASCO 2013 still leaves many biotech investors baffled at the market's new, intrinsic ~$1.9 B valuation of the company's early-stage oncology pipeline compounds CO-1686 and Rucaparib, although continuing analysis of the data seems to be supporting the new CLVS market cap quite nicely. After hitting a 52-week high of $86.29 per share in the height of the post-data rally, CLVS has settled comfortably above $70 per share.

In a previous note on Clovis, I briefly went over the company's history and the manner in which they were able to acquire their assets; specifically, the acquisition of CO-1686 through an interrupted partnership with Avila Therapeutics (due to Celgene's (CELG) acquisition) and the licensing deal which gave Clovis control of Pfizer's (PFE) old PARP inhibitor Rucaparib (aka PF-01367338). In this note, I will delve into the

Recent coverage provided for Opko (NYSE: OPK) included a simple financial model that supported a surprisingly high (~$1 B) valuation for a Phase III pipeline product hGH-CTP (a modified version of human growth hormone) that was added to the company's pipeline after the acquisition of PROLOR Biotechnologies.

The projected revenues for hGH-CTP are based on the market penetration assumptions of some other analysts (generally in the 30-40% range), although we feel that these could be even higher due to the significantly improved once-weekly regimen that hGH-CTP would offer relative to standard human growth hormone, which must be injected once per day for patients with stunted growth. We pointed to a somewhat similar improvement made in the dosing regimen for VEGF inhibitors in wet AMD treatment that was introduced by Regeneron (NASDAQ: REGN), which was a huge commercial success because of the practicality of reducing total number of

Earlier this week, Biogen Idec (NASDAQ: BIIB) was the worst performer aming the larger pharmaceutical companies after Cowen analyst Eric Schmidt pointed that the IMS prescription sales data for new prescriptions (NRx) of the company's recently launched multiple sclerosis / MS drug Tecfidera (dimethyl fumarate) may be flawed due to double counting of patients who were prescribed a new dose of the drug. After Biogen launched the drug earlier in the year at a price of $54,900 per year, Wall Street began to create a correlation between the drug's performance and the price of BIIB common stock.

This can explain the sensitivity that BIIB shares had to Cowen's bearish note on Tecfidera and the delay of the European launch into the second half of 2013.

There has been some skepticism over the drug because of the cheap manufacturing cost of the easily-available NF-κB inhibitor dimethyl fumarate (the active ingredient

OPKO Health (NASDAQ: OPK) has been seeing a steady rise in short interest throughout the last few months - with the last measurement by NASDAQ coming in at 30.16 M shares on May 15th 2013 as speculators begin to question the premium that the market is placing on the company due to the involvement of 37.5% individual shareholder and famous biotech investor Dr. Phillip Frost.

Also interesting in recent trading was the neutral/bearish reaction that the market had to OPKO's acquisition of PROLOR Biotech as announced on April 24th, which allowed OPKO to acquire what I consider an especially lucrative asset - hGH-CTP, in addition to the other development programs ,with a $480 M all-stock transaction (which has technically become cheaper with recent declines in OPKO share price). Phillip Frost's control of 12.7M shares of PBTH (nearly 20% of shares outstanding) seemed to ease the process, and allowed OPKO

Clovis (CLVS) is an acquisition-focused biopharmaceutical company that stayed under the radar after its NASDAQ IPO in November 2011. With two notable early-stage oncology compounds in its pipeline, Clovis didn't really attract much interest from the market until yesterday (June 3rd, 2013) - when the company reported results from ongoing Phase I/II trials for both CO-1686 and Rucaparib.

CO-1686 was originally designed by a biotech company named Avila Therapeutics, a covalent drug-focused entity that was acquired by Celgene (CELG) on March 7th, 2012 in a $925 M deal. The compound was introduced to the Clovis pipeline in a $209 M partnership made in 2010 between Avila and Clovis, and the IND application was accepted not long before the company held its IPO on April 3rd, 2012.

The molecule is a covalent drug that irreversibly inhibits epidermal growth factor receptor (EGFR), which aids cancer cells in proliferation. Clovis is specifically

In February 2013, Affymax (NASDAQ: AFFY) made headlines after a nationwide voluntary recall of the erythropoietic agent OMONTYS (peginesatide) after reports of extreme hypersensitivity reactions to the drug, as well as five deaths that were supposedly linked to the drug. Speculation quickly arose over the cause of these deaths, which could've been caused by human error or problems with a certain batch of the treatment (as only 0.2% of patients receiving OMONTYS experienced serious hypersensitivity) although shares were absolutely decimated by selling and a giant wave of short selling. Despite some rebounding, the stock still stands at YTD losses of 91.7% at the time of writing.

Things worsened for Affymax shareholders when the company announced a month later that it would significantly reduce its workforce, including employees from its commercial and medical affairs field organizations, as well as other officers and employees. The company's talk of limited resources and

Yesterday, we saw Amarin Corporation (NASDAQ: AMRN) at a new 52-week low of $6.25 per share and a 6% drop at the closing bell after a flurry of bad news hit the stock after Memorial Day weekend.

Although the biotech sector was quite mixed Tuesday amongst the smaller pharma companies, trading was mostly bullish and it was probably quite disheartening for Amarin shareholders to see such contrarian behavior.

Despite this, prescription data showed that Amarin's flagship EPA capsule Vascepa was once again performing along with the market's expectations (moving up in terms of total prescriptions sold last week). This may have helped ease fears about the company's momentum in the short run (in the MARINE indication, or in the indication treating hypertriglyceridemia patients with TG >500 mg/dL) after a short period of stagnation.

Still, the worry is now being shifted to Vascepa's prospects in the ANCHOR indication - the

In anticipation of major movement ahead with Q1 2013 earnings for Questcor Pharmaceuticals (NASDAQ: QCOR), a lot of speculative positions were opened on the long and short side of the trade in anticipation of potential surprises in the company's earnings and revenue. The company had posted record sales for its lead product H.P. Acthar gel for the fourth quarter of 2012, and bulls were generally expecting the momentum to continue into the next quarter while the product saw expansion into a few new indications, although a dip in the usage for the treatment of exacerbations in Multiple Sclerosis in the first two months of the year appeared to drag total Acthar sales low enough to cause a sales revenue decline in Q1 2013 relative to Q4 2012. Although this was exactly what the bears were looking for, the reaction to the Q1 earnings was clearly bullish. After April 30th,

One of the biopharmaceutical companies that has been lagging the stellar performance of its peers is Exelixis (EXEL), developer of the compound cabozantinib. Cabo, which was FDA approved last year for the treatment of medullary thyroid cancer (MTC), is now being marketed under the trade name COMETRIQ. In the company's reported Q1 2013 earnings release on May 7th, the company was able to present some early results for the drug's performance on the open market although it's difficult to accurately interpret a drug's intrinsic monetary potential with only a few weeks of sales data and estimates on the drug's penetration into a market.

For Q1 2013 the company reported $1.86 M in product revenues. Given the company's estimates that they could be treating up to 500-700 MTC patients within the current FDA-approved indication, we can infer that there is a $50 to $70 M market potential here, given that

Amarin Corporation (NASDAQ: AMRN) has been struggling a lot lately as retail channel prescription data for its EPA capsule Vascepa imply that the drug is starting to slow down its momentum in the MARINE indication (hypertriglyceridemia patients with >500 mg/dL). While the company has seen significant progress since the launch of the drug in January, it is still not causing any excitement in an investor base that wanted to see a big pharma buyout of the company ever since the company reported successful Phase III results.

Despite the incredible strength of the broader market and the biotech sector in particular this year, AMRN is down 14% YTD as of the time of writing. Since the company released Q1 2013 financial results (as discussed in a recent note), the company rallied all the way to $8.00/share before continuous selling brought shares back to the $7.00 per share level.

We

Vivus (NASDAQ: VVUS) has been seeing relatively modest growth in Qsymia (phentermine and topiramate ER) prescriptions since the drug launched in September 2012 under the FDA's REMS agreement, which restricted the drug's sales significantly due to the inability for patients to have prescriptions for the drug filled at brick-and-mortar pharmacies. Because of this, and because of an apparent and drastic overstatement of the true size of the prescription obesity drug market, investors have mixed and overall bearish opinion on VVUS since the FDA approval of Qsymia. The stock is trading at roughly half of its level post FDA approval.

While the larger trend since FDA approval remains negative, a relief rally that was initially discussed in a Bio-Wire note on April 18th brought the stock 17% higher since. This move was a reaction to a change in the Qsymia REMS which could have a profound (and much needed) positive

Although it seems that investors have lost their appetite for many stem cell investments at this stage of the broader rally in the stock market, there are exceptions worth pointing out. Neuralstem (NASDAQ: CUR), for instance, has been in a strong uptrend since, on April 17th, the company finally received approval from the FDA to commence a Phase II clinical trial in 18 patients with ALS (amyotrophic lateral sclerosis) using its line of spinal-cord derived stem cells NSI-566. These proprietary stem cells can be differentiated into neurons, which can (in theory) replace the dying cells in a patient with a neurodegenerative disease.

Although the jump from Phase I to Phase II development is not a reliable guarantee of eventual success for any therapy, this marks an important milestone for the company and also establishes the initial safety profile for Neuralstem's NSI-566. The market became particularly enamored with shares of

Shares of Aegerion Pharmaceuticals (NASDAQ: AEGR) rocketed 33% higher in last Thursday's trading after the company reported that it would increase the price of flagship product Juxtapid (lomitapide) from $235,000 per patient to $295,000 beginning June 1st. This significantly increases Wall Street's expectations of the company's top and bottom-line growth going into the next year. While many pharmaceutical companies struggle with the pricing power of their branded drugs for any number of reasons, it seems that Aegerion has found an extremely lucrative niche in hypercholesterolemia. Yesrterday shares pulled back a tad as some shareholders looked to take profits after such a violent move to the upside, but AEGR is expected to hold most (if not all) of the ground based on the long term financial effects of this pricing confirmation.

Investors are also anticipating a positive CHMP decision on the therapy. Expansion into Europe provides significant growth potential for

Last week was quite decent for Amarin Corporation (Nasdaq: AMRN) investors, who saw a 6% rally last Friday in reaction to the company's Q1 2013 financial results. Of particular interest was the continued growth in Vascepa (icosapent ethyl) capsules, which were approved for hypertriglyceridemia patients with 500+ mg/dL concentration in mid-2012. The launch at the end of January 2013 went surprisingly well, although it seems that Wall Street is still underwhelmed by the numbers that have been posted up to this point.

In the first quarter of 2013 (or the quarter ended March 31st, 2013) Amarin reported $2.34 million in product revenues, although the company mentioned $2.9 million of deferred product revenue that will contribute to revenues in Q2 2013 results, which are due in August 2013. The company's total prescriptions have been growing consecutively each month:

February: 3,224

March: 7,260

April: 11,768

The finalized figures from Amarin are

Today Dendreon (NASDAQ: DNDN) shocked the market after reporting an extremely disappointing $67.6 M in Provenge (sipuleucel-T) sales for Q1 2013, representing a 17.56% decline relative to $82 M in revenue reported in Q1 2012. The net loss for the quarter did also decline to $72 million relative to a net loss of $103.9 M in Q1 2012, although shareholders were clearly looking for Provenge sales growth to offset the company's operational losses.

The miss was attributed to loss of business in small accounts, which are favoring the likes of other post-chemo drugs approved for the same prostate cancer indication - specifically Xtandi and Zytiga. While the company has seen growth in large accounts and "increased recognition," the data is alarming.

Dendreon is continuing its efforts to bring COGS (cost of goods sold) to below 50% of revenues and expects this to happen in Q3 2012, although

Today, Dendreon (DNDN) shareholders will brace for the company's Q1 2013 earnings, which will be discussed in a conference call on Thursday at 9:00 AM EDT. Dendreon, which has been operating at steep losses years after the market launch of its flagship product Provenge (sipuleucel-T), is still attempting to reduce manufacturing costs of their prostate cancer therapy while boosting sales.

More recently, the company has been attempting an unconventional TV advertisement campaign which may (or may not) have an effect on Provenge sales in the United States. This is likely to be addressed in the earnings call conference that will be held tomorrow morning, or at least in the Q&A session.

We are also expecting Provenge to see a positive regulatory decision in Europe within the next few months, which opens up the European prostate cancer treatment market. Although exciting, this would not be a slam-dunk victory for

Female Sexual Dysfunction (FSD) is often overshadowed by the more prominent erectile dysfunction market. While companies like Pfizer (NYSE: PFE) recruit the likes of Bob Dole and other prominent celebrities to help push Viagra, the attention on FSD has been lacking to say the least. This obscures an analysis of a National Health and Social Life Survey performed six years before initial FDA approval of Viagra which estimated that 43% of women suffer from symptoms of FSD. This and other studies imply that there is indeed a vast and significant unmet need for FSD treatments that needs to be addressed to improve the wellbeing of millions of women. In addition to this, there is a huge and untapped therapeutic market that offers a multi-billion opportunity (mimicking the size and scope of the Viagra/Cialis market) for drug developers and their investors.

Currently there is a transdermal testosterone product for FSD

Responding to news that the company would withdraw its MAA (Marketing Authorization Application) for Belviq (lorcaserin) from the EMA, shares of Arena Pharmaceuticals (NASDAQ: ARNA) tanked by 9.2% last Friday, as investors questioned whether obesity drugs had a future in the EU market. Also adding to the anxiety amongst ARNA investors is the lack of DEA scheduling of Belviq as we approach the 1-year anniversary of the drug's FDA approval on June 27th, 2012.

Investors knew that European regulators were not as fond of this new generation of obesity drugs after Vivus (NASDAQ: VVUS) failed to attain approval for Qsymia (phentermine and topiramate ER) in late 2012, although it appears that a large number of Arena investors believed that the better-established safety profile of Belviq would lead to a successful MAA. It seems that Arena's correspondence with European regulators implied that there was little promise in Belviq's current