Wednesday, April 23, 2014

Daily Dose - Spectrum Pharmaceuticals, OncoGenex Pharmaceuticals

The Nasdaq Biotech Index pulled back 1.54% after two strong days of gains.  Here are some highlights for the day.

Spectrum (SPPI) announced that it's multiple myeloma treatment met it's primary endpoint and the company plans to submit an NDA in the 3rd quarter of this year with an expected PDUFA date in 2015.  The drug is an improved form of the chemotherapy drug melphalan.  If approved, analysts believe the peak sales of the drug could be as high as $50 million annually.  This is another near term potential catalyst for Spectrum on top of it's August 9th PDUFA date for it's lymphoma drug Belinostat.  The company already markets four drugs with sales of $155 million in 2013 and a number of other drugs in it's pipeline and partnerships with Biogen, Allergen, Bristol-Myers Squibb and others.  With a market cap of $453 million I consider the company to be a great value which is why I hold a long position in the company. 

OncoGenex (OGXI) announced the company and Teva received the Fast Track designation for it's partnered compound Custirsen in 2nd line castration resistant prostate cancer.  The drug already has Fast Track status for the same drug in first line CRPC and lung cancer, all of which are currently in phase 3 trials.  I wouldn't too much value on the designation as it's worthless if the drug isn't successful in it's phase 3 pivotal trial.  They expect enrollment to be complete in the 2nd line CRPC trial in the 2nd half of this year so I would expect top line results in the middle of 2015.  In the meantime, they should report top line results of the first line CRPC any time within the next few months.  They already announced the required number of events (deaths) have occured and that they are now analyzing the data so fingers crossed!

Hope everyone is having a great week and feel free to email or tweet me any questions,


Tuesday, April 22, 2014

Biotech Stocks make strong gains for second straight day - why?

The Nasdaq Biotech Index is up 3.4% after a strong gain on Monday after reports over the weekend that Pfizer had approached UK based AstraZeneca with a $101 billion takeover bid.  The 25% premium combined with the potential for the largest acquisition in the industry's history has many biotech investors excited about the prospects of further consolidation at premium prices.

I'd also keep an eye on oncology focused biotech as the biggest showcase event of the year, ASCO, is coming up at the end of May.  I'd expect press releases in the coming weeks on abstract presentations and a general run-up in these stocks going into the conference.

I'll be reporting more on ASCO as it nears. 

Thursday, April 10, 2014

Another reason to believe Mannkind shares are overvalued

I already believe Mannkind is overvalued due to it's $2.5 billion market cap, weak balance sheet, and lack of commercial partner.  Now they have another possible inhaled insulin competitor with a planned phase 3 trial next year.  Take a look at Adam's article for the details. 

Tuesday, April 8, 2014

Sunesis announces results at AACR - Wedbush reiterates $10 price target

As expected, Sunesis (SNSS) reported positive preliminary results of it's lead compound, Vosaroxin, in a phase 1b/2 study in AML and MDS.  The drug, combined with decitabine, had an overall response rate of 67% in the 24 patients treated.  Webush commented on the results and reiterated it's $10 price target on Sunesis. 

Monday, April 7, 2014

AACR Trading Opportunity - Sunesis

The American Association of Cancer Research 105th annual meeting is underway which sometimes provides opportunities for short term trades ahead of press releases for data presentations.  I think Sunesis (SNSS) is such an opportunity as updated phase 1b/2 data on it's lead compound, Vosaroxsin, in AML and MDS will be presented tomorrow.  I pulled the abstract and it's showing an 67% response rate which is a solid result and I'd expect a press release tomorrow to communicate these results.  I purchased 5,000 shares ahead of the data presentation. 

Friday, April 4, 2014

Exelixis upgraded by Piper Jaffray

Exelixis (EXEL) received an upgrade from Piper Jaffray this morning to buy with a price target of $11.  The firm believes that the market has "washed out" it's lead drug in phase 3 development for prostate cancer.  As I recently blogged, I believe in Exelixis' long term potential as they have a number of other shots on goal including phase 3 trials in HCC and RCC with the same compound as well as a phase 3 compound partnered with Roche in Melanoma which will report results later this year. 

Thursday, April 3, 2014

Second Quarter Biotech Trade Catalysts

There are a number of anticipated biotech trade catalysts in the second quarter which could either make you rich or put you in the poor house.  Let's take a look at a few and I'll provide my positions in the stock.

Mannkind (MNKD) - Yes, they almost had a sweep of yes votes at the Adcom meeting earlier in the week but the upcoming PDUFA decision might not be so convincing.  I believe that Afrezza will receive approval for both type 1 and type 2 diabetes but I think the label and post-marketing studies will be disappointing for investors and will either keep the stock in neutral or send it down.  Take a look at the price action of Chelsea's after it received Northera approval a few months ago to get an idea of where my logic.  I currently hold naked calls of Mannkind at $7 and $10 so I'm semi-short the position (I don't think the stock will go above these prices at the time of expiration).

OncoGenex (OGXI) - They should be reporting phase 3 results of it's lead compound in prostate cancer anytime this quarter.  The company is partnered with Teva on the trial and has a market cap of only $159 million so if the trial meets its primary endpoint of overall survival, I think it's really going to move.  The drug was successful in it's phase 2 trial and they used the same design in the phase 3 trial so they just need a repeat of performance which is why I have confidence in the trial and hold 2,000 shares of the company.

Exelixis (EXEL) - They were hammered last week after reporting that their phase 3 trial of Cometriq in prostate cancer wasn't stopped early for efficacy.  I still think Cometriq could meet it's primary endpoint of overall survival and the company has additional phase 3 trials in HCC and RCC which will read out in 2015-2016 so there are other shots on goal.  I own 26,000 shares so I have a great deal of confidence in the companies long-term potential.

Merrimack (MACK) - The company expects to report phase 3 results of it's compound, MM-398, in pancreatic cancer.  If the trial meets it's primary endpoint of overall survival, I would expect a big move as it validates the companies delivery technology and also provides a huge opportunity to treat second-line pancreatic patients which currently have limited treatment options.  The company has a number of other compounds in development, a partnership with Sanofi, and a market cap of only $529 which makes it one of my favorite holdings at 15,400 shares.

Anthera (ANTH) - They will report phase 2 results of it's lead compound in Lupus.  I visited the family last week and we went to the casino and I played craps and roulette.  My investment in Anthera feels very similar to the bets I placed at the casino.  Let's hope that the outcome is better.....I own 3,000 shares of this small company with a small market cap of $66 million.  Lupus patients have limited treatment options so a positive result would be huge for patients and for this little biotech.

Navidea (NAVB) - The company has a PDUFA date with the FDA of June 16th to expand it's mapping product into neck and head cancers.  If approved, it would drastically expand the potential market for lymphoseek and provide much needed revenue growth to help fund it's two other phase 3 imaging studies in Alzheimer's and Parkinson's. 

If you own any of these stocks I wish you luck in the coming months and I'll be sure to report the outcomes of these catalysts!

Daily Dose - Mannkind, Cyclacel, and a Vivus downgrade

I'm sorry for being out MIA for the past week but just returned from a trip back east to see my family.  There has been a lot going on since I left for my trip. 

Mannkind MNKD won a convincing  13-1-1 and 14-0 advisory panel for it's inhaled insulin drug Afrezza in type 1 and type 2 diabetes, respectively.  That took just about everyone by surprise as the stock soared after the vote.  I predicted a positive vote in type 2 but was shocked by the type 1 vote.  I also predicted a strict label which I'm sticking to as the panel echoed the FDA's concerns for patients with asthma and COPD.  I'd also expect two post-approval studies for lung cancer though Mannkind is already performing a phase 3 study to evaluate the long-term effects so this might alleviate some of those requirements.  I still believe Mannkind is overpriced as it's carrying a $2.5 billion market cap, lacks a commercial partner, has a negative book value, is burning through cash, and I expect an unfavorable label.  I guess time will tell how this story plays out.

Cyclacel CYCC announced a public offering of stock after the market closed today.  Management has been communicating that they have "plenty" of cash to get through their recruitment of their lead product in AML but looks like they are going to the well again.  They expect full enrollment in their phase 3 trial in AML in Q4 due to expanding the enrollment centers into Europe.  I only own 2,000 shares and the stock is down after hours due to the announcement. 

Vivus VVUS was downgraded by Piper Jaffray from $8 to a $3 price target.  They have concerns about the lack of sales traction of their obesity drug Qsymia and inability to land a large pharma partner.  I own 6,000 shares so I share in these concerns but I'm not giving up hope.  The new management team was able to land solid partnerships in the United States and abroad for their erectile dysfunction drug Stendra so I have confidence in their ability to land a partner for Qsymia (did you hear my Vivus management?   You stink at selling.   Close a damn deal before you burn through your cash!!!!!) 

Stay tuned for more from the