A Look at Three Big-Time Biotech Movers
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Monday produced some big-time biotech news that moved a number of high-profile stocks. In this article I am looking at what moved, why it moved, and what it may mean to investors.
Keryx Biopharmaceuticals’ (NASDAQ: KERX) future is a little less uncertain
It has been a volatile year for Keryx Biopharmaceuticals: The stock had fallen from $5.00 to $1.50 early in 2012 after top-line data for its drug Perifosine did not meet expectations. However, on Monday the stock is higher by more than 40% after announcing that its other drug, Zerenex, a kidney disease drug, met its late-stage trial goal with the FDA. The company is now seeking a marketing authorization with the EMA and is expected to submit a new drug application to the FDA later this year.
The stock is currently trading with a market cap of $345 million, which is about equal to its peak sales potential. As a result, if we assume that Keryx will trade like most other biotech stocks, with a price/sales between three and five then it has quite a significant amount of upside potential over the next three-four years. Therefore if the stock experiences a pullback of any sorts it might be wise to buy.
Furiex Pharmaceuticals (NASDAQ: FURX) gets a big approval
Shares of Furiex Pharmaceuticals rallied almost 50% after clearance from the FDA for a substance, alogliptin, and two combinations that aid in the treatment of Type 2 diabetes. Furiex has partnered with Takeda Pharmaceuticals, and now that the approval has occurred, Furiex is eligible to receive a milestone payment of $25 million. Furiex is also poised to receive royalties and sales-based milestone payments. Most expect the drug to benefit from a large patient population of Type 2 diabetes, and could lead to over $1 billion in total sales. Therefore, Furiex with a $315 million market cap is attractive as a potential investment for larger long-term gains.
Repros Therpeutics’ (NASDAQ: RPRX) Rally Hits a Speed Bump
After a one-year gain of about 250%, shares of Repros Therpeutics fell 30% after disclosing that data for its Androxal treatment for secondary hypogonadism would be announced in Q3 rather than Q2. This most likely contributed to the fall, but it was the use of “marked discrepancies” that really spooked investors ahead of a major clinical study result. In early studies this is a company with a product that has looked quite strong, but an aggressive financing history and a superb marketing team has always left me questioning this company. I’m not suggesting that its product won’t work, but I do suggest that investors be very careful with this company.
The three stocks above moved to the largest degree, however there were other companies in the news on Monday. Immunomedics traded higher by 3% after announcing an agreement with Algeta to develop a treatment using Immunomedics’ antibody. Idenix Pharmaceuticals also traded higher after it entered into a collaboration and Biogen lead the space in market cap gains after growing revenue by 9% during its last quarter. All in all it was a good day for the space, one that clearly shows the ability for a biotech stock to trade with large gains, or devastating loss, on just one headline.
BrianNichols has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!