Biopharmaceutical Stocks: Possible Catalysts in November (Part I)
Jorge is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
A good investment strategy is to anticipate future movements of biopharmaceutical companies. These companies are typically reevaluated weeks before presenting results of their studies or future meetings with the FDA.
The first company that has an important meeting with the FDA is Dynavax Technologies (NASDAQ: DVAX). On Aug. 28, 2012 the company announced that the U.S. Food and Drug Administration (FDA) had informed the company that its Vaccines and Related Biological Products Advisory Committee (VRBPAC) was scheduled to discuss HEPLISAV at its meeting on November 14-15, 2012.
Dynavax's Biologic License Application (BLA) for HEPLISAV, pursuing an indication for immunization against infection caused by all known subtypes of hepatitis B virus in adults aged from 18 to 70 years, is currently under review by the FDA. The Prescription Drug User Fee Act (PDUFA) date for the FDA to complete its review is Feb. 24, 2013.
The stock currently trades at $4.17, with a market capitalization of $745.21 million. The 52-week high is $5.34 and 52-week low is $2.67. A positive report on the part of the VRBPAC could catapult shares of Dynavax to the 52-weeks high. Dynavax Technologies is a favorite candidate of analysts. On Sept. 17, 2012 Jim Cramer said:
Dynavax has a late-stage hepatitis-B drug which is very promising for the company. The drug has a success rate of 91 percent after just two shots, versus 81 percent success rate after three shots for the current market-leading hep-B vaccine. Despite the drug being groundbreaking, Cramer noted that the FDA recently approved a similar vaccine for cervical cancer. Though Cramer is bullish on the potential, he said investors should do their homework and exercise caution. Should FDA approval be granted, Dynavax shares could double... or they could slump over 50 percent on an adverse ruling. No news is expected for the next six weeks.
Cramer isn't the only one who likes Dynavax; On Nov. 6, 2012 JMP Securities announced that it initiated coverage on Dynavax Technologies with a Market Outperform. In those days, JMP marked a price target at $6.00.
Exelixis (NASDAQ: EXEL) is the second company that can be a catalyst in November. On July 30, 2012 The company announced that the U.S. Food and Drug Administration (FDA) had accepted for filing the New Drug Application (NDA) for cabozantinib as a treatment for patients with progressive, unresectable, locally advanced, or metastatic medullary thyroid cancer (MTC). The FDA also granted priority review designation to the NDA for cabozantinib.
The Prescription Drug User Fee Act (PDUFA) action date is Nov. 29, 2012. Priority Review is granted to a pharmaceutical product that, if approved, would meet an unmet medical need for a serious and life-threatening condition. The stock currently trades at $4.88 with a market capitalization of $724.29 million. The 52-week high is $6.95 and 52-week low is $3.94, but the shares of this company could explode if the FDA approves cabozantinib.
Another company with a catalyst in November is Theravance (NASDAQ: THRX). It is a biopharmaceutical company that engages in the discovery, development, and commercialization of small molecule medicines primarily for therapeutic areas of respiratory diseases, bacterial infections, and central nervous system pain (CNS). The company announced on Sept. 19, 2012, that the Office of the Federal Register published an advanced display of the Federal Register Notice, which states that on Nov. 29, 2012, the U.S. Food and Drug Administration’s Anti-Infective Drugs Advisory Committee plans to discuss the new drug application for VIBATIV ® (telavancin hydrochloride) for injection, submitted by the company, for the requested indication of nosocomial pneumonia (pneumonia contracted by hospitalized patients), including ventilator-associated pneumonia. The stock currently trades at $21.45, with a market capitalization of $2.10 billion. The 52-week high is $31.87 and 52-week low is $12.91. If the FDA approves VIBATIV ®, the shares could soar above the 52-weeks high.
The next company that intends to present results of its studies in November is causing much excitement among the investors, because the potential of its drug is huge. This company is Acadia Pharmaceuticals (NASDAQ: ACAD), a biopharmaceutical company focused on drug discovery and clinical development of small molecule drugs that address unmet medical needs in neurological and related central nervous system disorders. On Sept. 5, 2012 the company announced the completion of enrollment in its ongoing pivotal Phase III trial with pimavanserin in patients with Parkinson’s disease psychosis (PDP). Top-line results from this trial are expected to be announced by the end of Nov. 2012.
The results are scheduled for November, but investors need to bear in mind that it is not certain that this presentation will take place during this month and it could have delays. The stock currently trades at $2.27, with a market capitalization of $122.38 million. The 52-week high is $3.06 and 52-week low is $0.93. With a few positive results of Pimavanserin, Acadia's shares could multiply its value; but with negative results, Acadia's shares could return to their historic minimum in $0.70.
The readers should know the risk of investing in these companies. For example, we can analyze the last similar case with the company Catalyst Pharmaceutical Partners (NASDAQ: CPRX). It is a development-stage specialty pharmaceutical company focused on the development and commercialization of prescription drugs targeting diseases and disorders of the central nervous system. On Nov. 8, 2012 the company announced top-line results from its U.S. Phase II(b) clinical trial evaluating the use of CPP-109 (vigabatrin) to treat cocaine addiction. The results showed that CPP-109 did not meet the primary endpoint -- that a significantly larger proportion of CPP-109-treated subjects than placebo-treated subjects were cocaine-free during the last two weeks of the treatment period (Weeks 8 and 9). For this reason, the shares fell by more than 60% to $0.50 on Nov. 8 2012.
TraderUsa has no positions in the stocks mentioned above. The Motley Fool owns shares of Exelixis. Motley Fool newsletter services recommend Exelixis. 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.If you have questions about this post or the Fool’s blog network, click here for information.