Thursday, January 30, 2014

Daily Dose - AVEO, KBIO, GERN

Welcome to today's daily dose!  The Nasdaq Bio index is up 3.29% at this moment which is a strong bounce back from yesterday's slide.  Here are the movers, shakers, and stories for the day.

Aveo Pharma AVEO is down 5.65% after announcing that it and partner Astellas discontinued a phase 2 trial of it's flagship drug, Tivozanib in Breast Cancer due to enrollment challenges.  This should be of no surprise as they already alerted investors to this challenge, the drug was rejected by the FDA last year for treating liver cancer, and warned that the drug was unlikely to succeed in its phase 2 trial in colon cancer.  In summary, it looks like their lead compound is a dud and worthless. The company has two other compounds, one in phase 1 and one in preclinical development, but they are many years away from proving themselves and providing any value to investors.  The company did project having $113 million in cash at the end of the year.  With a market cap of $83 million, the company does have some value.  The big question is "what do they do with the cash"?  What they SHOULD do is find a private biotech company with compounds in phase 2 development that requires cash and perform a reverse merger before they blow through the money.  What they will LIKELY do is blow through the money to develop their early stage compounds (ie management keeps getting paid).  I would recommend sitting on the sidelines until there are further developments.

KaloBios KBIO is down 27.31% today after reporting that KB003 didn't meet it's primary endpoint in a phase 2 trial in severe asthma.  This was it's lead drug so it's a big blow to the company.  It does have a few other compounds in early/mid stage development, one of which for cystic fibrosis, and partnerships with Sanofi and Novartis.  The company had $55 million in cash at the end of the third quarter and has a current market cap of $111 million so it may be worth an investment at these levels.  I'm going to do some more research and let you know if I get in.

Geron GERN is up 21.71% to $5.27 today which is baffling after issuing 22.5 million shares at $4.00 this morning.   Stocks usually fall after diluting existing shareholders but not in this case.  I wish I was in on the offering at $4 as that group just made a 30% return in less than a day!  Adam Feuerstein at The Street had a good article on Geron's compound earlier in the week which is worth reading before making an investment in Geron.  Adam Feuerstein Article

That's it for today's daily dose.  Please feel free to send me any questions or comments!

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Wednesday, January 29, 2014

Daily Dose - OMER, PRAN, PGNX

The Nasdaq Biotech index was down .56% today with these notable movers and shakers.

Omeros (OMER) was up 2.58% to $11.52 after reporting positive results from it's schizophrenia drug, OMS824, in a Phase 2a which isn't huge news as the results were related to tolerability and pharmacokinetics but popped the stock nonetheless.  The stock has been on a tear over the last year with an upcoming PDUFA date of June 1st for Omidria, a drug used during intraocular lens replacements surgery.  With a market cap of $349 million, a PDUFA date of June 1st, and a number of drugs in the pipeline, Omerus could be a value buy. 

Prana (PRAN) bucked the market as well with a 2.71% jump to $10.23.  The company is expecting to report results on two Phase 2 trials in Huntington's Disease and Alzheimer's of it's candidate PB2T within the next few months.  With a market cap under $400 million, the stock could explode if the Alzheimer's results are solid.  On another hand, the stock will get crushed if both trial results come back negative as PB2T is it's lead candidate and all other compounds are in very early stages of testing.  Out of the money call options are very expensive which shows the markets feel the same about the upside potential in the event that results are positive. 

Progenics (PGNX) was hammered 27.42% after it was reported that two people died in a trial for it's experimental drug to treat prostate cancer.  The prostate market it already crowded and safety concerns is definitely a big blow to this small biotech.  They did have over $70 million in cash at the end of the 3rd quarter and a number of other compounds in development so it may be a value play if the stock slides below $3.

Those are the highlights for today.  Come back tomorrow for your next shot of the daily dose!