Biopharma Stocks: The Good, The Bad and The Ugly

Jorge is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Never before a title of a mythical film was so well suited to three biotech and biopharma companies. The year 2012 is nearing completion and it is time to recap the movements produced in various biotech, biopharma and pharma companies. But three companies are about to end the year far from how they started it. We are going to start with "The Good."

The Good

This company is conducting one of the most promising studies to fight cancer. Its mechanism of action is unique and could revolutionize the therapies for cancerous tumors of a size not exceeding 2-3 cm. As readers have been able to discover I am talking about Celsion Corporation (NASDAQ: CLSN) and its promising study Thermodox. This mechanism or treatment is combined with the approved drug doxorubicin. Thermodox is a system of applying heat (39 °C-43 °C) that acts on the small cancerous tumors and with the prior administration of doxorubicin. Currently, Thermodox is ongoing in Phase III clinical trial program in the treatment of HCC. The results of this study are expected for January, 2013.

At the beginning of 2012, Celsion marked a price $1.72 (as Jan. 3, 2011) per share. Currently, Celsion's shares are traded at $7.36 per share (as Dec. 7, 2012). This means an increase of 327.91% per share. For this reason, the company has won "the good" award.

The company has enough cash to complete this study. Any positive news of Thermodox could increase the shares. However, if Thermodox does not present good results, it could mean look out below.

The Bad

On May 24, investors were surprised with a company. In a week, the shares of this company were from $1.4 to $23.43 per share. This means an increase of 1573.57% per share. This situation happened after the company would have announced a reverse split in its shares. This company, which surprised all of us, is Rosetta Genomics. Currently, Rosetta's shares are trading at $4.49 per share (as Dec. 7). This means a decrease of 80.84% per share from its peak marked at $23.43. 

On Dec. 7, Rosetta Genomics announced a filing for $75 million in mixed securities shelf. This means that it will hurt the investors who bought shares during the good week of May, 2012. For this reason, the company has won "the bad" award.

The Ugly

I must admit that I like the following company. But the global crisis facing markets has not benefited the company with its star product Provenge.  This company could not be anu other than Dendreon Corporation (NASDAQ: DNDN). The mythical company that traded at $50 per share after the approval of Provenge. On April, 2010, Dendreon received full approval for its prostate cancer vaccine Provenge from the FDA. The expectation generated with this product was very high. The market expectations created in Provenge are very similar to some of the products approved by the FDA during this year such as Qsymia, a obesity product of Vivus and Belviq, an obesity product of Arena Pharmaceuticals.

If we see the historical revenues chart of Dendreon, we can verify that the company is significantly increasing sales. But the expectations generated by the market with Provenge were much higher. For this reason, the company has won "the ugly" award.

<img src="http://media.ycharts.com/charts/bebaca685ed33932e2547b187d867428.png" />

DNDN Revenue TTM data by YCharts

At the beginning of 2012, Dendreon Corporation marked a price $7.56 (as Jan. 3, 2011) per share . Currently, Dendreon's shares are traded at $4.87 per share (as Dec. 7) marking a decline of 35.58%.


JorgeAura has no positions in the stocks mentioned above. The Motley Fool owns shares of Dendreon. 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!

blog comments powered by Disqus