Thursday, February 27, 2014

Daily Dose - Oncogenex, Merrimack, KaloBios

A number of buy recommendations came out this morning for some of my holdings and one reports earnings after market close. 

Oncogenex OGXI was upgraded to buy by CRT Capital with a $20 price target.  Oncogenex will report phase 3 results of it's prostate cancer drug, Custirsen, sometime in Q2.  The stock has a discounted market cap of $172 million for a company with three phase 3 and seven phase 2 trials running which is why I hold a significant position. 

OGXI

 
11.695  


5,000   $11.01   $3,377.46   6.13%   $58,475.00
KaloBios KBIO was upgraded to buy by JMP Securities with a $8 price target.  The company took a recent hit after it's flagship Asthma drug failed in a phase 2 study but the company has other compounds with promise and great partnerships with Sanofi and Novartis so I'm looking to buy at these levels.

Merrimack MACK will report Q4 and full year results after the bell today.  The stock has been on a tear since pushing back expected results from it's pancreatic cancer drug, MM-398, about six months due to longer overall survival trends.   Merrimack is my pick up the year as pancreatic cancer is one of the deadliest and has few treatment options (think the late Patrick Swayze) so a survival benefit would be outstanding for patients and for the Merrimack.

MACK

 
5.005  


15,400   $2.9977   $30,871.84   66.81%   $77,077.00  






















































































Tuesday, February 25, 2014

Trade Updates - Vivus, Sunesis Pharma

Vivus announced earnings after the market closed last night and they lived up to expectations with another quarter of disappointing sales of it's obesity drug Qsymia.  This was followed by downgrades by JP Morgan and Bank of America which has sent the stock down over 12% for the day.  The positive highlights was the licensing revenue generated through it's three partnerships for it's erectile dysfunction drug Stendra.  I purchased another 1,000 shares of Vivus to increase my position to 6,000 shares as I believe a partnering agreement or buyout is inevitable in the near term.  There's no way that Vivus will be able to compete on it's own between Arena's Belviq and after Orexigen's Contrave is approved in a few months.  Management knows this, analysts know this, and investors know this.  Management has already inked three deals for Stendra in the past year so I have confidence in their ability to close a deal. 

VVUS

 
5.9099  


6,000   $9.3052   -$20,442.05   -36.57%   $35,459.40  
Sunesis had it's price target raised to $14 share by Leerink.  The company has a drug in a phase 3 trial to treat AML and expects to report results mid-year.  The stock had jumped over 20% at one point this morning so I sold my 2,000 shares to take the gain and expect the stock to drift back down which will provide another buying opportunity (I sold at $6.21 and the stock has already settled down to $6.11 so I expect to get in again below $6 with plenty of time for the pre-result run-up later in the year). 












Monday, February 24, 2014

Daily Dose - Palatin, Marina Biotech, Vivus

The Nasdaq Biotech is roaring forward after a great prior week up 1.5% already today!  Here are some highlights for the day.

Palatin PTN presented positive new data of Bremelanotide in Female Sexual Desire Disorder.  Female Sexual Desire Disorder people!!!!  Have you ever wished, hoped, dreamed that your wife, significant other, and/or girlfriend wanted to have sex with you more (or at all)?  I'm shocked when I get together with my male compadres and hear how little they have sex with their wives.  Well, now there's hope.  Now there's Palatin and it's FSDD drug Bremelandotide!  Need I say any more?
PTN

 
1.1599  


8,000   $1.2182   -$476.39   -4.88% $9,279.20  
Marina Biotech MRNA is up over 16% today after receiving $6 million in financing.  Marina was one of my sleeper picks back when it was under $.30 share and has been on a tear since.  I sold my position and took profits a few weeks ago but I still think it's a great buy with a market cap of only $25 million, a great intellectual property portfolio focused on RNAi, and a vast number of partnerships including Roche, Novartis, ViThera, Pfizer, AstraZeneca, and a number of academic alliances.  Now that they have some money, they should be able to realize the true potential of the company and it's IP assets.  I may buy into the stock again in the coming days/weeks/months.

Vivus VVUS will announce financial results after the market closes today.  What they need to announce is a freaking partnership with a big pharma to sell their obesity drug Qsymia in the United States.  This is the typical story of a biotech that does a nice job developing a product and getting it approved by the FDA but then fails miserably because it attempts to transition into a commercial organization (see my recent concerns regarding Chelsea's recent drug approval).  The good news is that they inked two partnerships, in the US and overseas, to sell it's erectile dysfunction drug Stendra late last year.  That should bring in some much needed revenues but the big story remains Qsymia and the stock will suffer until a big pharma is secured. 

VVUS

 
6.73  


5,000   $9.9806   -$16,312.96   -32.65%   $33,650.00  

Trade Update - Prana Biotechnology

I sold my 2,000 shares in PRAN this afternoon after the stock jumped 12%.  I've purchased May 17th calls at $17 and here's my logic.  Alzheimer's has proven to be extremely difficult to treat (unfortunately as my grandmother had this awful disease) so the chances of success of the upcoming results expected March in their phase 2 trial is slim (please see my earlier posts).  Nonetheless, if the trial does miraculously come back positive the stock is going through the roof because of the huge, multi-billion market potential.  If you are in PRAN, good luck and I really hope this works for the individuals that suffer from this horrible disease!

PRAN May 17 '14
$17 Call
  1.50  


20   $1.23   $514.82   20.72%   $3,000.00

Sunday, February 23, 2014

An Opportunity to Good to Pass up: Rexahn Pharmaceuticals

I've been investing in biotech stocks for the past 18 years and occasionally will come across an opportunity that seems too good to pass up. I believe this is the case with Rexahn Pharmaceuticals (RNN). The company has a mere market cap of approximately $158 million yet they have five identified compounds in development, and a solid balance sheet to help fund operations through the next 18 months.

Rexahn is a biotech company focused on developing innovative therapeutics with first-in-class or market-leader potential in various cancer indications including pancreatic, ovarian, stomach, NSCLC, colon, renal, and other solid tumors. Their lead compounds include Archexin, Supinoxin, RX-3117, and a number of early stage compounds including RX-21101 and RX-0201N. These compounds are protected with a broad patent portfolio that extends up to 2025.

Archexin is an AKt-Inhibitor that recently completed a Phase IIa trial in pancreatic cancer. The trial results demonstrated treatment with Archexin in combination with gemcitabine provided a median survival of 9.1 months compared to historical survival data of 5.65 months (Burris et al., 1997, J. Clin Oncol 15:2403) for standard single agent gemcitabine therapy. This significant 61% improved survival benefit, combined with an excellent safety profile, shows that this compound has significant commercial potential. The company initiated a second phase II trial in metastatic rental cell carcinoma January 2014. There are also plans for a phase II trial in ovarian cancer and the company has already submitted the protocol to the FDA. The phase II study will assess the efficiency and safety of the compound when used in combination with both paclitaxel and carboplatin as a second-line therapy in subjects who are platinum-sensitive following their first relapse. The company is actively evaluating partnership opportunities to help fund the continued development of this compound.
RX-3117 is a DNA synthesis inhibitor targeting various indications including pancreatic, NSCLC, colon, renal, and other solid tumors. The compound has completed a successful exploratory phase 1 trial in solid tumors and initiated a phase 1b trial in cancer patients with solid tumors January 2014.  The company is actively in negotiations for a partner for this compound with a target date of mid 2014.  

Supinoxin is a best-in-class p68 RNA helicase inhibitor targeting solid tumors including NSCLC, colon, rental, and pancreatic cancers. The IND was filed in June 2012 and a phase 1 trial was initiated in August 2013 with results expected by the end of March.  There are also active partnership discussions to help fund the development of this promising compound.

Rexahn has two early stage signal inhibitor compounds that it hopes to advance in clinical trials in various cancer types in the next three years - RX-21101 and RX-0201N. They also have the potential to divest two CNS assets - Serdaxin for depression and Zoraxel for sexual dysfunction. Both compounds have completed phase II studies with mixed results and may be valuable to the right partner with expertise in CNS therapies.

The company reported a cash position of over $41 million and no long-term debt as of February 7th. Management projects that they currently have enough cash to fund operations through the next 18 months which should provide for a number of clinical catalysts before needing to raise additional capital.

A pipeline of five identified compounds in various stages of development, a market cap of only $158 million, and cash to fund operations for the next 18 months.  An opportunity to good to pass up? You make the call!

Saturday, February 22, 2014

Daily Dose - Chelsea, Exelixis

The Nasdaq Biotech had a nice week up over 3.6%.  The highlight of the week was the FDA approval of Chelsea's drug Northera for dizziness.

Chelsea CHTP was up approximately 20% after it received FDA approval for Northera after a 16-1 positive Adcom meeting in January.  The FDA had previously rejected the drug in 2012 but Chelsea ran another trial and convinced regulators to approve the drug under the accelerated approval process due to the unmet need for symptomatic NOH.  Now the challenge turns to the commercialization of the drug.  Chelsea claims that the market opportunity is north of $300 million but many of these small biotech's do a nice job developing new treatments but fail miserably transitioning to a commercial entity.  The hope is that they sign an commercialization agreement with a partner with the sales expertise to realize the full potential of the drug.  I have a small position in Chelsea post-approval but plan to liquidate my position in the coming weeks. 

CHTP

 
6.04  


2,000   $5.7426   $574.83   5.00%   $12,080.00
Exelixis announced 4th quarter and full year results on Thursday.  There was nothing exciting that came out of the release or conference call.  Their lead compound, Cometriq, had modest sales growth of 8% quarter over quarter in treating MTC (one of the rarer forms of thyroid cancer).  The potentially exciting news will come later in the year when they expect to report results of four (yes, four) phase 3 trials.  These trials include overall survival of Cometriq in MTC (this isn't big news as they already have the majority of market share in the MTC market prior to running this trial), overall survival in prostate cancer (if positive, this would be a HUGE opportunity), pain reduction in prostate cancer (this would further help differentiate Cometriq from other prostate cancer drugs assuming the overall survival trial is positive - ie help drive sales), and progression free survival results of a partnered drug with Roche and Genetech, Cobimetinib, in patients with malignant melanoma. 

Exelixis also has phase 3 trials of Cometriq in HCC and RCC which should how results in 2015 and 2016 as well as a number of phase 1 and 2 trials of the drug in numerous indications.  They should also have a decision on expanding approval of Cometriq in MTC within the European Union sometime in the coming months.  The company also has a long list of partnered, early stage compounds so there's even more opportunities for shots on goal in the coming years. 

Taking all of the opportunities highlighted above, combined with a market cap of $1.29 billion and cash on hand of over $400 million, I believe Exelixis is a very strong buy at these prices which is reflective in my below position. 

EXEL

 
7.02  


12,000   $7.1151   -$1,181.06   -1.38%   $84,240.00

















































                        



Wednesday, February 19, 2014

Daily Dose - AVEO, OGXI, PRAN

Welcome back to today's daily dose!  I'm sorry for the hiatus but it took me a few weeks to recover from the Seahawks Superbowl victory!  The Nasdaq Biotech Index fell .98% today which is consistent with the drops in the major indexes.  Here are some highlights.

AVEO Pharma AVEO was unchanged today almost a week after announcing that Astellas ended it's partnership for it's lead compound Tivozanib after disappointing recruitment in it's breast and colorectal cancer trials.  This is no surprise after my prior post regarding the drug.  Aveo is left with a few early stage candidates and a pile of cash.  If the board of directors fulfills it's fiduciary responsibilities, they will put the company up for sale or look for a reverse merger with a private biotech before they burn through the cash.  There's also value in it's NOL's which could provide a profitable biotech a tax offset against profits.  I do have a position in AVEO as outlined below in hopes for this outcome but I wouldn't recommend purchasing the stock. 
 AVEO

 
1.85  


8,000   $1.78   $539.93   3.79%   $14,800.00     
 AVEO Jul 19 '14
$2.50 Call

 
0.25  


-40   $0.15   -$440.61   -68.78%   -$1,000.00  
OncoGenex OGXI announced that the target number of events (deaths) was reached in it's phase 3 trial in prostate cancer.  The drug, Custirsen, is in three phase 3 trials (first line prostate, second line prostate, and lung cancer) with partner Teva Pharmaceuticals.  Management expects results somewhere around two to three months from now and a positive overall survival benefits would be massive for this company and stock as they have no approved products.  I find the company extremely inexpensive with a market cap of $172 million with a drug in three phase 3 trials and another drug, Apatorsen, in seven phase 2 trials in various cancer indications.  They also expect phase 2 results for Apatorsen in bladder cancer in the second half of the year.  I think this company has tremendous upside highlighted by my below position.
 OGXI

 
11.70  


5,000   $11.01   $3,402.46   6.18%   $58,500.00
 Prana Biotech PRAN fell over 13% after making a huge run the day before after reporting mixed results from it's phase 2 study of PBT2 in Huntington's disease.  The big catalyst will be the results of it's PBT2 phase 2 study in Alzheimer's disease which is expected in March.  The Huntington results were mixed - the primary endpoint was safety which was met but the efficacy results weren't impressive.  An effective Alzheimer's treatment would be a gold mine but it's proven extremely difficult to treat so the odds are very low for a successful phase 2 outcome.  Nonetheless, I've taken a small position as I'm comfortable with the risk vs. reward but I would only recommend a small position for my readers due to the tremendous risk (ie don't mortgage your home or put your kids college money in this security!).
PRAN
  8.76  


2,000   $5.2666   $6,976.81   66.17%   $17,520.00
That's it for today's daily dose and come back tomorrow for my highlights and recommendations for the day.  Thank you!

G6GUW6MS5XP3