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Joe Kunkle
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History/Trading Style: I have been trading for 12 years, since I was 15, and have studied a variety of trading techniques and strategies. I combine many trading philosophies and combine technical analysis, fundamental analysis, and macro-economic analysis into every trade. I mostly trade options... More
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  • Speculative BioTechs: Finding the Next 10-Bagger 9 comments
    May 7, 2009 9:28 AM | about stocks: VNDA, SNSS, ALTU, HNAB, LJPC, HEPH, CYCC, INHX, EPIX.PK, CAPS.PK, CEGE, QLTI, JAZZ, DNDN, BMRN, SPPI

     I am sure by now most of you have seen Vanda Pharma (VNDA) is up almost 900% following the FDA approval of its main drug, but many may be unaware that the shares were trading at less than cash value before the announcement, and were also downt o $1 from highs of $35.

     

    The prudent thing to do is look for other stocks that exhibit many of the same characteristics that Vanda (VNDA) had before it exploded 900%.  The strategy is to buy a basket of BioTechs that trade less than cash value, are down big from highs, and have drugs in the pipeline that could make or break the company.  I have done the screening and here are the names that I found, without doing in depth research on each name.  Feel free to buy a basket of these because if one or two take off, it will more than pay for the others that may fail.  I will leave the in depth research up to the BioTech analyst, but here are the stocks I advise looking to buy a basket of with a brief synopsis of each and links to drug pipelines:

    Jazz Pharma (JAZZ): Trading at $0.74, down from $18 in 2007.  Price/Cash ratio of 0.83.  Has a new CEO and drugs in pipeline for narcolepsy, OCD, social anxiety, and fibromyalgia.  Pipeline

    QLT Inc (QLTI): Trading at $2.09, down from $28 in 2004.  Price/Cash ratio of 0.88. Strongest fundamentals of the group.  Develops opthamology drugs for various eye diseases.  Much of price delines due to lawsuit with Mass General over Visudyne royalties.  Pipeline

    Cell Genesys (CEGE): Trading at $0.54, down from $10.50 in 2004.  Price/Cash ratio of 0.60 with 6% of float short.  Q1 losses shrunk but Dendreon (DNDN) Provenge data hurts CEGE due to competing drug candidate.  LeRoy Kapp, a 10% owner, has been actively buying shares around $0.60.  Company is exploring strategic alternatives.  Pipeline

    Orthologic (CAPS):Trading at $0.68, down from $8 in 2004.  Price/Cash ratio of 0.61.  Development stage company for cartilage, tendon, and dental-bone repair.  Pipeline

    Epix Pharma (EPIX): Trading at $0.47, down from $23 in 2004.  Price/Cash ratio of 0.80.  Has clinical drugs for central nervous system disorders, lung diseases, and Alzheimer's.  Company may file for bankruptcy if it can't restructure debt.  Pipeline

    Inhibitex (INHX):  Trading at $0.32, down from $12.50 in 2004.  Price/Cash ratio of 0.42.  Develops anti-infective products for Hepatitis C, HIV, Herpes, and more.  Pipeline

    Cyclacel Pharma (CYCC):  Trading at $0.60, down from $7.50 in 2006.  Price/Cash ratio of 0.48.  Develops drugs for various cancers.  Pipeline

    La Jolla Pharma (LJPC):  Trading at $0.20, down from $65 in 2004.  Price/Cash ratio of 0.57.  Drug developer for Lupis and other autoimmune diseases.  Recently stopped Riquent trials with BMRN.  Pipeline

    Hollis Eden (HEPH): Trading at $0.37, down from $14 in 2004.  Price/Cash ratio of 0.45.  Develops drugs focused on aging related issues.  Pipeline

    Hana Biosciences (HNAB): Trading at $0.29, down from $13 in 2006.  Price/Cash ratio of 0.67.  Develops supportive care products for cancer.  Recently received going concern notice.  Pipeline

    Altus Pharma (ALTU): Trading at $0.30, down from $25 in 2006.  Price/Cash ratio of 0.19.  Develops drugs for gastrointestinal and metabolic disorders.  Recent shakeup in management seen as a plus. Pipeline

    Sunesis Pharma (SNSS): Trading at $0.21, down from $6.75 in 2006.  Price/Cash ratio of 0.68.  Develops oncology related products. Recently secured financing and Q1 loss narrowed. Pipeline

    Spectrum Pharma (SPPI): Trading at $2.70, down from $7.50 in 2007.  Price/Cash ratio of 1.12.  Develops oncology and urology drugs, with Zevalin its big product.  Pipeline

     

    Disclosure: No Holdings

    Themes: Bio Tech, Small Cap, Speculative Stocks: VNDA, SNSS, ALTU, HNAB, LJPC, HEPH, CYCC, INHX, EPIX.PK, CAPS.PK, CEGE, QLTI, JAZZ, DNDN, BMRN, SPPI
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  •  
    Pharm is the #1 sector for zombie companies that just sit around making promises built on virtually nothing and collecting investor capital. Most of the companies are worth nothing because they have nothing... And Vanda now has next-to-nothing since they have a drug no doctor will prescribe provided that he has correct information.

    The best way to make cash in biotech is to look for smallcap pharm companies that are actually developing GOOD drugs.
    9 May 2009, 12:49 AM Reply Like
  •  
    Such as Vertex...
    9 May 2009, 12:49 AM Reply Like
  •  
    JAZZ up 300% today
    10 Jun 2009, 01:40 PM Reply Like
  •  
    So when Vanda goes back down to $0.45 in a year or two, are you going to put it back on the list?
    12 Jun 2009, 03:48 AM Reply Like
  •  
    3 Month Check In:

    Stock Bought Current % Return
    JAZZ $0.74 $6.52 781.08%
    QLTI $2.09 $3.89 86.12%
    CEGE $0.54 $0.28 -48.15%
    CAPS $0.68 $0.64 -5.88%
    EPIX $0.47 $0.01 -97.87%
    INHX $0.32 $0.45 40.63%
    CYCC $0.60 $1.02 70.00%
    LJPC $0.20 $0.18 -10.00%
    HEPH $0.37 $0.47 27.03%
    HNAB $0.29 $0.63 117.24%
    ALTU $0.30 $0.34 13.33%
    SNSS $0.21 $0.40 90.48%
    SPPI $2.70 $6.80 151.85%

    93.53% Average
    11 Aug 2009, 10:54 PM Reply Like
  •  
    I guess the recent run in $SNSS will improve this result.

    $SNSS $0.21 $2.10 1000%
    11 Dec 2009, 11:31 AM Reply Like
  •  
    Thanks for the information..It was very helpful!
    22 Feb 2010, 02:48 AM Reply Like
  •  
    UK small cap company Futura Medical plc is a pharmaceutical group that develops innovative products for the consumer healthcare market. FUM have currently five main products under development for sexual healthcare and pain relief management: CSD500, MED2002, PET500,TPR100 and RAD100.

    Potential 10 bagger, with an excellent risk reward profile. About to be transformed with their lead product expected to come to market this year

    CSD500 (also known as the viagra condom) to be part of the SSL Durex brand. Aimed at helping healthy men maintain a full erection during intercourse whilst wearing a condom. - next milestone is submission RNS in Q1 2010 followed by anticipated Granting of CE Mark in 45 to 90 days.
    24 Feb 2010, 05:40 AM Reply Like
  •  
    Better start monitoring SNSS, ISCO, FACT, VVUS & MDLH. all will ( should ) show big gaind in the next 6 months. Read their web sites!!
    26 Feb 2010, 06:10 AM Reply Like
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