Hemispherx, Genta, and Bioelectronics are causing quite a stir today among biotech investors.
It's been another busy day for biotech stocks, if not from their company's PR departments, then at least in terms of investor discussion and debate. Considering we opened a can of worms for Hemispherx BioPharma Inc. (NYSEMKT:HEB), Genta Inc. (OTC:GETA), and Bioelectronics Corp. (OTCPK:BIEL), the least we can do is offer an update.
Hemispherx BioPharma Inc. (HEB)
Hemispherx made its way onto our plate in early June after the second wave of swine flu speculation was put into motion. See, Hemispherx has developed a drug called Ampligen. Most investors are eyeing (as is the FDA) Ampligen as a treatment for chronic fatigue syndrome, but Ampligen also happens to be an antiviral that can possibly treat swine flu..
The problem with Ampligen as a swine flu treatment is that everybody and their brother is making one, and they're all pretty promising. The problem with Ampligen as a chronic fatigue syndrome treatment is that the FDA is taking its own sweet time coming to a decision. (The delay is something of a rd flag in itself.)
Well, there's still not word yet on the FDA's final decision, though several of the advisory committees are meeting this week to do so - we could hear something soon. And, based on HEB's 17% runup today, it looks like speculators are betting on an approval.
We're not quite as confident, but even if we were, we can't help but wonder if this is going to be a case of 'buy the rumor, sell the news'.... particularly after leaving a big gap behind with today's chart.
Genta Inc. (GETA)
We've been following Genta since before the ticker changed from GNTA to GETA....since April 1st (no foolin'). The stock got our attention after it made a big move following an announcement that a lawsuit against the company had been dropped. It was strictly a 'trading' stock, but a good one at the time. We had no idea how things would unfold from there.
Genta's oral cancer treatment Tesetaxel is an outstanding drug. The problem was, with it only being in Phase II testing and the company running low on money to continue its development, something had to change (i.e. the company needed some cash or a rich partner) fast.
As it turns out, the company was able to raise $10 million by issuing stock and debt. Good for the company, bad for other shareholders.
There's been no update since then regarding Tesetaxel or Genasense, the company's melanoma treatment that should finish its current Phase III testing sometime in Q4.
However, today's modest rise after a rebound attempt a couple of weeks ago is curious indeed, at least from a trader's perspective. The ebb and flow remains 100% fear/greed based, but after a big move lower, GETA could be setting up yet-another upside run.
There's not any news in the near term pipeline that we expect to help the bounce get going, but speculation and impatience should be enough. If $0.40 can be cracked with a little volume, GETA may be a decent short-term trade again.
Bioelectronics Corp. (BIEL)
Our first and only look at Bioelectronics was back on June 26th. The stock captured our attention thanks to a big move from $0.0012 to $0.0049, which was largely the result of the company's request for 510K clearance (selling approval) of their Allay product, and an awarded patent on way to apply an electromagnetic field to bodily tissue.
We knew the chart was entirely driven by the news, but we didn't care - we just thought it was an interesting long-term idea that may have also served some purpose for short-term traders. That said, we weren't surprised to see it slide from a high of $0.01 back to yesterday's close of $0.0046; news-based euphoria fades quickly.
And, based on today's high-volume 18% gain, euphoria (even without news) can kick in quickly as well.
While we're short-term speculators at heart, we'll reiterate our view that Bioelectronics is more attractive as a longer-term recovery play than it is as a short-term trade. Drug-free pain control can seem a tad boring, but it's not a shot in the dark in terms of regulatory approval.
That said, there's no word yet on when we should expect to hear about any 510K approval.