Seeking Alpha

Joe Kunkle's  Instablog

History/Trading Style: I have been trading for 11 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
My business:
Options Hawk
My blog:
Options Hawk
  • Speculative BioTechs: Finding the Next 10-Bagger 5 comments
    May 7, 2009 09:28 AM | about stocks: VNDA, SNSS, ALTU, HNAB, LJPC, HEPH, CYCC, INHX, EPIX, CAPS, 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, CAPS, CEGE, QLTI, JAZZ, DNDN, BMRN, SPPI
Back To Joe Kunkle's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

This post has 5 comments:

  •  
    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.
    May 09 12:49 AM | Link | Reply
  •  
    Such as Vertex...
    May 09 12:49 AM | Link | Reply
  •  
    JAZZ up 300% today
    Jun 10 01:40 PM | Link | Reply
  •  
    So when Vanda goes back down to $0.45 in a year or two, are you going to put it back on the list?
    Jun 12 03:48 AM | Link | Reply
  •  
    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
    Aug 11 10:54 PM | Link | Reply
Full index of posts »
Latest Followers

StockTalks

  • Citrix (CTXS) Call Buzzing...could be in MSFT sights?
    May 21, 2009
  • Market Pullback? Noone told the Health Care Plans...WLP, UNH, HS, HUM, CI, AET, WCG, MOH, CYH, AGP
    May 07, 2009
  • Follow me on Twitter.. Options_Hawk
    May 01, 2009
More »
Posts by Ticker

Latest Comments


Most Commented
  1. Speculative BioTechs: Finding the Next 10-Bagger (5 Comments)
  2. Hawkins (HWKN): Small Cap Growth Stock at a Major Discount (1 Comment)
  3. 3 Stock Valuation Bubbles Ready to Burst (1 Comment)
Posts by Themes
Banks, Bio Tech, Bio-Tech, BioTech, Blue Chip, Bonds, Buffett, Chemicals, Commodities, Commodity, Consumer Goods, Dividend Stocks, Dividends, Earnings, Emerging Markets, Energy, Financials, Foreign Stocks, Fundamental, Gold, Grocery Stores, Growth, Healthcare, High Yeld, Homebuilders, Indonesia, Industrial, Industrial Goods, Inflation Hedge, International, International Funds, Long Idea, Long Ideas, Long/Short Ideas, Machinery, Materials, Medical Devices, Medical Equipment, Mergers and Acquisitions, Metals, Minerals, Miners, Movie Theater, Natural Gas, Oil, Options, Options Trading, Packaging & Containers, Recreational Vehicles, Regional Banks,
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.