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!

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