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Christmas Comes Early For These 3 Small Biotech Stocks

|Includes: Progenics Pharmaceuticals Inc. (PGNX), PTLA, SGYP

"I like coffee because it gives me the illusion that I might be awake." - Lewis Black

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Christmas came early this week for the shareholders of these small biotech stocks on Friday.

First, Portola Pharmaceuticals (NASDAQ:PTLA) went up by some 33% on Friday. The trigger was the news that the FDA had accepted betrixaban for priority review for the treatment of extended-duration prophylaxis of venous thromboembolism {VTE} in acute medically ill patients with risk factors for VTE. A priority review shortens the review period to six months from the standard ten months. Betrixaban's PDUFA date for this indication is now June 24th, 2017.

Additionally, Portola announced that the European Medicines Agency has validated its Marketing Authorization Application for betrixaban for extended-duration prophylaxis of VTE in adults with acute medical illness and risk factors for VTE. This twin dosed of good news caused the stock to spike some 33% Friday, a very nice early Christmas present for Portola's shareholders and a good omen for the New Year.

They said timing is everything in life, and we certainly had that on our view on Portola. We had done an optimistic piece on Portola heading into 2017 on Tuesday. With confidence that the recent Complete Response Letter around the manufacturing issues around Andexxa will be soon resolved and this unexpected good news around Betrixaban; 2017 is setting up as a very good year for Portola's shareholders.

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Note: Portola was one of eight small cap positions in the Biotech Forum's 15 small cap holdings that surged at least seven percent on Friday (two more were up "only" 5%). In the spirit of the holidays, we are giving out free two week trials into this top-ranked offering through midnight Monday. If interested in becoming a better biotech investor, please activate your risk-free 14 day trial offer HERE.

Synergy Pharmaceuticals (NASDAQ:SGYP), another member of the Biotech Forum portfolio, was up more than 20% on Friday. After the bell on Thursday, the company announced positive results in its second Phase III trial using plecanatide to treat iirritable bowel syndrome with constipation (IBS-C). The results echoed the positive results from the first Phase 3 trial that came out approximately two weeks ago.

Plecanatide is currently under review to treat chronic ideopathic constipation. It has a PDUFA date of January 29th, at which time I expect plecanatide to be approved for that indication. In trials the compound has shown it is as or more effective than the current standard "Linzess" and has less side effects such as diarrhea. If approved, the company will filed a supplementary NDA for IBS-C sometime in the first quarter and I also expect that to be approved by the FDA. Linzess did $150 million in net sales in the United States in the second quarter.

One reason the stock surged on Friday, as this news make Synergy a more likely buyout target. The company has been a consistent target of buyout rumors in 2016. One rumored interested suitor has been Allergan (NYSE:AGN) who has been very active in the M&A arena recently and has stated its desire to expand into the gastrointestinal space. In my opinion, a more likely suitor is Takeda who has articulated it has ~$15 billion to spend on acquisitions and was recently involved in negotiations to buy Valeant's GI business for some $10 billion. Synergy may not make it through 2017 as a standalone entity, which I am sure its shareholders will be okay with.

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Note: There are now only 7 days left to try out the Insiders Forum on a 14 day free trial offer and lock in perpetually our low rates before they go up $50/annually or $5/month starting January 1st. As of the market close yesterday, the portfolio is now up 36.22% since its launch late in June. This almost triple the return of Russell 2000 over that time span.

Position Open Date Closing Date Entry Price Closing Price Loss/Gain
Aerie Pharmaceuticals (NASDAQ:AERI) 8/21/2016 10/10/2016 $19.15 $40.91 113.63%
Health Insurance Innovations (NASDAQ:HIIQ) 7/18/2016 11/11/2016 $3.96 $9.20 132.32%
Sterling Construction (NASDAQ:STRL) 6/30/2016 11/16/2016 $4.84 $7.87 62.60%
Delta Airlines (NYSE:DAL) 8/1/2016 12/13/2016 $38.75 $49.98 28.98%
Cara Therapeutics (NASDAQ:CARA) 7/11/2016 12/23/2016 $5.18 $9.97 92.47%

We closed out our fifth winning position in the Insiders Forum portfolio Friday. We will be adding two new holdings to the portfolio over the next ten days. To sign up for your risk-free two week trial, please click HERE.

Finally, Progenics Pharmaceuticals (NASDAQ:PGNX) which I recently profiled on these pages, came through with its own encouraging results from its developmental pipeline late Thursday. The stock rallied eight percent on Friday after an independent monitoring committee completed its review of an interim analysis of the ongoing Phase 3 trial of Progenics' prostate cancer imaging agent "1404" and recommended the trial continue.

To recap the investment case for Progenics. Oral relistor was approved by the FDA on July 19th. This is already triggering a substantial boost in sales at marketing and distributing partner Valeant Pharmaceuticals (VRX) which also just announced it is increasing its sales force in the treatment area. This should boost relistor sales further. This will cause royalties to rise nicely in the quarters ahead and accelerate the timeline Progenics can earn some $200 million in additional sales milestones.

Second, Azedra which is a late stage compound for the treatment of a couple of rare cancers, should release trial results in the first quarter. They are highly likely to be positive and this new compound could hit the market before 2017 is complete.

1404 has the potential to be targeted at a larger market than either relistor or Azedra. As noted in my previous article, the market is giving Progenics no value for this potential. Therefore, even though PGNX is up some 80% in recent months; it still is one of my favorite small cap biotech stocks heading into 2017.

Thank You & Happy Hunting

Bret Jensen

Founder, Biotech Forum & Insiders Forum

Disclosure: I am/we are long PGNX, PTLA, SGYP.