The Time Is Right for These Seven Biotechs
Incyte (INCY) shares have been clobbered after the company took about $50 million in restructuring charges to shut down its Palo Alto facilities. But the company ended its June quarter with about $470 million in cash. That's an important number because it puts an effective floor under the stock near current levels (the company's market capitalization is closer to $500 million). The company is just now moving to clinical trials with its first significant drugs. Its HIV drug has advanced the furthest so far and is in phase II trials.
NPS Pharmaceuticals (NPSP) is showing signs of life with shares having nudged off the 52-week low of $16.48, about half the 52-week high of $36.61. The timing is just about right since the company is likely to release a bushel of news in the fall. Sensipar (or "Mimpara," as it is known in Europe) for treatment of secondary hyperparathyroidism is likely to get approved in Europe in the fourth quarter of 2004. NPS Pharmaceuticals will present new data on Preos, the company's osteoporosis drug, in an effort to widen the market for the drug in October. And the company is expected to see proof-of-concept results for its new migraine drug by the end of 2004.
Onyx Pharmaceuticals (ONXX) is valued at $1.3 billion by the stock market, way above its $240 million in cash and cash equivalents and an indication that the company is well along the path that Incyte is just beginning. The company's drug for advanced renal cell cancer is now in Phase III trials, and the company is talking with the FDA about filing for approval based on complete Phase II trials. In addition, Onyx is about to start new trials for its drug for malignant melanoma in early 2005.
Remember, even big-name biotech stocks aren't ones to fall in love with. They're highly volatile and subject to huge seasonal moves. Buy low and sell high is definitely the strategy here. And this season is the time to think about putting it to work.
Changes to Jubak's PicksBuy Cell Genesys. This is a highly speculative pick. But when you're looking at the seasonal strength of the biotech sector in the fall and the kinds of worries that are bogging down drug stocks, speculative isn't a bad way to go. A small stock like Cell Genesys will get more pop from any move up in the sector than its bigger brethren. And because the company's leading drugs are still years from market, the stock price is driven by research news from the fall wave of medical conferences, not by worries over things like Medicare reimbursement.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider Cell Genesys to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV