Companies in the biotechnology space are often trade like speculative investments. Speculation for FDA approvals may lead shares higher. Profit-taking often follows after companies gain approvals, as investors move on to focus on operational costs and product sales.
4 companies that rallied significantly and are selling-off in the short term are a starting point for investors.
1. Keryx Biopharmaceuticals Inc. (KERX, Earnings, Analysts, Financials): Rallied in late-January 2012 by over 40%, from positive results in its experimental kidney disease drug. Keryx reported that phosphate levels in blood were reduced in subjects, meeting its late-state trial goal. Since trading up to as high as $10, shares plunged after the company offered 8.2M shares at $8.49. The offering will raise as much as $80.4M. Keryx traded recently at around $6.70.
Focuses on the acquisition, development, and commercialization of pharmaceutical products for the treatment of life-threatening diseases, including cancer and renal disease. Market cap at $529.06M, most recent closing price at $6.60.
2. Oncolytics Biotech Inc. (ONCY, Earnings, Analysts, Financials): Traded above $4.50, but closed recently at $3.96. Preliminary results for Reolysin showed the treatment was safe and well-tolerated. The drug is used to treat metastatic colorectal cancer. The company priced its 8M share offering at $4, which was around 15% lower than a previous-day closing price. The funds will be used for clinical-trials and manufacturing-related activities.
Focuses on the development of oncolytic viruses as potential cancer therapeutics. Market cap at $290.73M, most recent closing price at $3.79.
3. VIVUS Inc. (VVUS, Earnings, Analysts, Financials): Shares peaked at $30 in late-July 2012 but closed at $12.58 recently. Vivus said that the European Medicines Agency recommended against approving Qsymia. Earlier in February, shares were trading higher because the company said Qsymia helped in weight loss.
Engages in the development and commercialization of therapeutic products for underserved markets in the United States. Market cap at $1.1B, most recent closing price at $10.89.
4. Dendreon Corp. (DNDN, Earnings, Analysts, Financials): Traded as high as $7, but fell to $5.67 recently. Maxim downgraded its shares, because the firm was concerned about sales of Provenge. Last year, shares were $17.50. Provenge is an expensive therapy, costing $93,000. Much of the trading in its shares is speculative: investors think the company could be taken over.
Engages in the discovery, development, and commercialization of therapeutics to enhance cancer treatment options for patients. Market cap at $845.67M, most recent closing price at $5.48.
(List compiled by Chris Lau)
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