Saturday, February 21, 2015

Biotech Investing: Upcoming Trade Catalyst Targacept (TRGT)

Targacept (TRGT) is a stock to consider with an upcoming catalyst expected in the second quarter.  The company will report phase 2 results on its sole compound, TC-6499, for the treatment of diabetic gastroparesis.

Usually I wouldn't touch a company with only one drug in development in one indication but I believe this may a unique value proposition.  If the trial is successful, the stock will make a major move as it's currently priced with zero expectations of a positive result.  The company had over $115 million in cash and short/long term investments at the end of Q32014 while the market cap is under $90 million.  Even if the results come back negative, the company has the cash to in-license a compound or be a reverse merger candidate for a private company looking to go public (and get $100 million in cash in the process).

I've got 10,000 shares of Targacept as I like the risk vs. reward and possible positive scenarios.

Do you own due diligence and best of luck fellow biotech investors!

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