Monday, March 2, 2015

Biotech Investing: Reader question on Provectus (PVCT)

I hope everyone had a great weekend!  I received the following question from EJ over the weekend regarding PVCT.

Looks like PVCT finally gonna start Phase3 trial for melanoma drug. Phase2 results were amazing. Any thoughts on this one?

EJ, I wouldn't touch this one.  The company only had less than $18 million in cash at the end of the 3rd quarter and a robust, quality Phase 3 trial will cost approximately $100 million so there's definitely going to be shareholder dilution in the near future.  Also, no partner for a small biotech is a red flag.  Their market cap is $162 million and I just feel there are much better companies out there at a lower market cap with more promising products.

I like and own CPXX, OGXI, ONTX, and TNXP.  All have drugs either in Phase 3 trials (ahead of PVCT) or drugs getting ready to enter Phase 3 trials.  And they all have market caps less than $100 million and more cash on hand that PVCT.  You may want to check them out if you are looking for other high risk, good value investing opportunities.

Thank you for the question and good luck!

Thursday, February 26, 2015

Biotech Investing: Merrimack (MACK) stops trial of MM-111

Merrimack ceased Phase 2 trials of its investigatory drug MM-111 after the DSMB review showed that Progression Free Survival was worse in the compounds arm versus the control arm.  The company has a number of compounds in its pipeline so it's not a huge hit but still a negative.

The company's lead compound, MM-398, is being submitted to the FDA to treat Pancreatic Cancer.  I would expect the PDUFA date sometime in the 4th quarter of this year which is a major trade catalyst.

Also, they hinted in today's 4th quarter results call that they are looking to secure a partner prior to initiating a pivotal trial in breast cancer with another advanced compound, MM-121.  I wouldn't be surprised if they come through with a partner based on the impressive Phase 2 results in the subgroup that they plan to target in the pivotal trial.

Good luck fellow Biotech Investors!

Saturday, February 21, 2015

Biotech Investing: Upcoming Trade Catalyst Targacept (TRGT)

Targacept (TRGT) is a stock to consider with an upcoming catalyst expected in the second quarter.  The company will report phase 2 results on its sole compound, TC-6499, for the treatment of diabetic gastroparesis.

Usually I wouldn't touch a company with only one drug in development in one indication but I believe this may a unique value proposition.  If the trial is successful, the stock will make a major move as it's currently priced with zero expectations of a positive result.  The company had over $115 million in cash and short/long term investments at the end of Q32014 while the market cap is under $90 million.  Even if the results come back negative, the company has the cash to in-license a compound or be a reverse merger candidate for a private company looking to go public (and get $100 million in cash in the process).

I've got 10,000 shares of Targacept as I like the risk vs. reward and possible positive scenarios.

Do you own due diligence and best of luck fellow biotech investors!