Thursday, March 6, 2014

Daily Dose - Navidea Bio, Rigel Pharma

The Nasdaq Biotech Index pulled back 2.62% today after strong gains earlier in the week. 

Navidea Biopharmaceuticals jumped 8.11% after announcing full year 2013 results and providing guidance of $5 million - $6 million in 2014 revenues for it's lymphatic mapping agent Lymphoseek.  The agent was approved March 2013 in the United States for breast cancer and Melanoma and has already captured 10% market share for this indication within it's first twelve months of sales.  I believe Navidea has a great deal of upside potential as there are a number of upcoming catalysts which can significantly expand the addressable market for Lymphoseek and create shareholder value.  There are TWO supplemental NDA reviews coming up for the agent; one to expand use for head and neck cancers and one to expand the labeling to support more broader use on June 16 and October 16, respectively.  Also, the European Medicines Agency is expected to make a decision on approval within the EU sometime this month.  These three events have the potential to significantly increase Lymposeek's addressable market in 2014.  Also, let's not forget that Navidea has TWO additional imaging agents for Alzheimer's and Parkinson's in Phase 3 trials expected to read out in 2015 and 2016, respectively.  I have two long positions in Navidea but I may add to this position in the coming months. 

NAVB Apr 19 '14
$2 Put

-100   $0.30   $914.01   29.62%   -$2,000.00

NAVB Jan 17 '15
$2 Put

-100   $0.538   $293.36   5.37%   -$5,000.00
Rigel Pharmaceuticals climbed over 10% today after announcing promising preclinical results of it's treatment, R118, in Peripheral Artery Disease.  The company also announced that the compound will now enter phase 1 human trials.  I feel like the jump might be a bit overdone since the drug is still many, many years from approval assuming the trials are successful but it is a company to keep an eye on and I may take a long position in the coming months.  The company does have a reasonable valuations of $395 million when you take into account they have $212 million in cash and some other programs with solid partners such as AstraZeneca.  It gives me great comfort when a major pharmaceutical player partners with a small biotech as you know they've done extensive due diligence into the company that's unavailable to the retail investor. 

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