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Calithera Biosciences (CALA) Excellent Data On Renal Carcinoma

|About: BeiGene, Ltd. (BGNE), CALA, CARA, Includes: ZCOR
Summary

CALA positive outlook likely on heels of renal cancer combo

Positive momentum looks strong into the Fall

CALA upside could see another 10%

Stay clear of pain drug maker Egalet Corp

U.S. Food and Drug Administration (FDA) just gave (CALA) Fast Track designation to their CB-839 drug used in combo with everolimus. This is used in a study treating patients with metastatic renal cell cancer. CB-839 is a glutaminase inhibitor and being developed in combo with other drugs with (BMY).

The company will be starting a randomized trial of CB-839 in combo with everolimus in the second half of 2017. This drug has shown a lot of promise and good clinical data so far. I would expect a $20 target to hit.

I highlighted CARA Therapeutics (CARA) and issued a Sell recommendation on the stock. The stock has come under considerable pressure on news their oral pain drug was ineffective in the most recent study. This is a huge set back for the company and could take away any potential upside to the company stock price. I continue to reiterate a SELL on the company even with the big sell off.

In researching CARA Therapeutics I came across Egalet Corp (EGLT) which is a specialty pharmaceutical company. They engage in pain treatments.  The company has several products including a nasal spray non-steroidal anti-inflammatory (NSAID) drug. The company released OXAYDO to deter oxycodone abuse. Although these are legitimate products they don’t represent a big revenue stream. The FDA approved ARYMO ER which is an abuse deterrent extended release oral morphine product. On January 2017 when the FDA approved ARYMO ER they did not approve the label claim the oral form of the drug deters abuse. This was critical to the success of any of these pain drugs geared toward the opioid epidemics. Since then the stock has been in a slow decline. I recommend a sell rating on (EGLT).

I previously recommended Beigene (BGNE). The stock has moved 10+ percent quickly on larger volume. I can't speculate what caused the move, it could be a large buy from a holding company. This is a very positive sign that someone believes in this company and is taking a large position in the company. I continue to see positive outlook on the stock and reiterate a buy on the stock.

Recommendations:

BUY on (CALA), (BGNE)

SELL on (CARA), (EGLT)

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.