Quest For 10-Baggers in BioHealth in 2010 (JAZZ, TRGT, VNDA, DNDN, HGSI, CGEN, BNVI, QCOR, ACHN, PSDV, ATHX, SNSS, AVNR, BIOD, ALXA, CTIC)
If one thing was noticed in biotech stocks, or BioHealth stocks as we often say, it was that investors, traders, and speculators all piled into the chase for the next ten-bagger late in the year. When you have as many biotech and BioHealth stocks that ran over 1,000% in 2009 that is only to be expected…. hence the 10-bagger comments. We had many biotech and biohealth shares rally from their lows significantly this year, with companies such as Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ), Targacept, Inc. (NASDAQ: TRGT), Vanda Pharmaceuticals, Inc. (NASDAQ: VNDA), Dendreon Corp. (NASDAQ: DNDN), and Human Genome Sciences, Inc. (NASDAQ: HGSI) all being in or having been in the 10-bagger club this year.
But late in 2009 we started seeing an onslaught of low-priced stocks with small cap or micro-cap values running rapidly higher on news. In some cases these faded, and in some not. We saw the traders run up shares of Compugen Ltd. (NASDAQ: CGEN), Bionovo, Inc. (NASDAQ: BNVI), Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR), Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN), pSivida Corp. (NASDAQ: PSDV), Athersys, Inc. (NASDAQ: ATHX), Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS), and AVANIR Pharmaceuticals, Inc. (NASDAQ: AVNR) on news late in 2009. Also covered as potentials for this are Biodel Inc. (NASDAQ: BIOD), Alexza Pharmaceuticals, Inc. (NASDAQ: ALXA), and Cell Therapeutics, Inc. (NASDAQ: CTIC).
We have reviewed each of these and given a synopsis for each to see if these could be the 10-baggers for 2010.
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Sunesis Pharmaceuticals (SNSS) Moves 25%
Sunesis Pharmaceuticals (NASDAQ:SNSS) is up another 25% on news of positive comments from Skymark Research. Reuters reports that the shares are also being affected by rumors of a joint venture with a larger drug company.
Douglas A. McIntyre
Is Sunesis The Next 10-Bagger? (SNSS, DNDN, JAZZ, TRGT, VNDA, HGSI)
Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS) has become the next small cap and low-prices biotech craze this week. We have seen this occur this year in other stocks, and now it seems that investors and traders are ready to jump into many of these small-cap biotech stocks with the hope of catching the next 10-bagger (1,000% return on investment). When you look at the amazing performance of many stocks in the sector, you probably won’t be too shocked to see why traders and speculating investors pile in:
- Dendreon Corp. (NASDAQ: DNDN) is up 900% from its lows over the last year.
- Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ) has jumped about 1,400% from lows.
- Targacept, Inc. (NASDAQ: TRGT) has jumped over 1,000% from lows.
- Vanda Pharmaceuticals, Inc. (NASDAQ: VNDA) has popped over 2,000% from its lows.
- And the biggie…. Human Genome Sciences, Inc. (NASDAQ: HGSI) was under $0.50 in March, making those fortunate few who bought after the March price tank have a gain of 50-fold if had they still held on today.
Today’s action dwarfs what was seen on Tuesday after Sunesis announced positive data from its two Phase II clinical trials of its lead drug candidate called voreloxin. The company said that the results showed strong efficacy and safety profile when used as a single agent or in combination with chemotherapy in patients with difficult to treat acute myeloid leukemia.
This data was presented at the 51st American Society Hematology Annual Meeting in New Orleans, LA. Sunesis showed that the high rates of remission in both trials have translated into durable effects with meaningful preliminary overall survival results.
With an anticipated median survival of three and a half to six months on currently available therapies, primary refractory and first relapse AML patients are particularly in desperate need of more effective treatment options. The company said that it plans to discuss the data with the FDA in End-of-Phase 2 meeting scheduled for the first quarter of 2010.
This stock closed at $0.44 on Monday before the data was released. But then on December 8 it had trading volume of 10,042,800 and closed up at $0.53. Yesterday it closed up at $0.60 on 4.1 million shares. The 52-week trading range was $0.05 to $0.90, which shows how this was a dormant stock. But then this morning traders began piling into the stock. And piled and piled. At 2:00 PM EST the stock is up a whopping 120% at $1.32 on 23 million shares having traded, but the stock traded as high as $1.84 on the day.
If you smooth out the most recent trading action and if you smooth out the exact lows you have an average share price of probably $0.30 or $0.35. If we see one more day of this action, a 10-bagger is more than just theory.
Even after the run this week, this is a mere $45.4 million market cap stock. At the end of September, it held $3.87 million in cash. Always keep in mind that there is a nasty side to major price gains in small speculative biotech stocks that release positive study data. That is the “news selling” where companies raise cash in private placements. Don’t be too shocked if you see the company use the gains to raise cash.
JON C. OGG
Biotech Winners & Losers
It doesn’t matter if it’s a bull market or a bear market for biotechs, well at at least for the most part. Every day there are select winners and losers. A bull market won’t save a one-hope wonder that fails Phase III trials, and a bear market won’t keep down the company that ends up with the new budding cancer cure. He are some from today:
BIOTECH WINNERS
- SGX PHARMACEUTICALS (SGXP) +125.55%
- BIOHEART, INC. (BHRT) +11.51%
- COMPUGEN LTD (CGEN) +9.43%
- DARA BIOSCIENCES (DARA) +8.03%
- SUNESIS PHARMACEUTIC (SNSS) +7.68%
- CHELSEA THERAPEUTICS (CHTP) +7.00%
- PLURISTEM THERAPEUTC (PSTI) +6.84%
- INCYTE CORP (INCY) +6.44%
BIOTECH LOSERS
- NEUROBIOLGL TECH INC (NTII) -19.23%
- HEMISPHERX BIOPHARMA (HEB) -13.08%
- REXAHN PHARMACEUTICL (RNN) -13.04%
- HESKA CORPORATION (HSKA) -9.76%
- IDENIX PHARMACEUT (IDIX) -8.96%
Jon Ogg
July 9, 2008
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