Small-Cap Biotechs Pop Before Conference

Two small-cap biotech stocks -- OncoGenex Pharmaceuticals(OGXI Quote) and Oxigene(OXGN Quote) -- are generating buzz and a lot of investor interest with the start of a major cancer research conference just a few days away.

The American Society of Clinical Oncology (ASCO) annual meeting kicks off Friday and runs through Tuesday in Orlando. Wall Street typically regards the ASCO meeting as the Super Bowl of cancer drug research. This year, however, the event more resembles a large county fair due to the paucity of groundbreaking clinical data expected to emerge from five days of presentations.

That doesn't mean investors aren't paying attention, and this year's focus leading up the meeting has definitely been on small-cap cancer drug stocks.

This is part of a larger trend in recent weeks and months in which investors seem to be placing more bets on small, speculative biotech stocks rather than investing in the larger and more well-established stocks in the sector.

OncoGenex shares took off May 14 after a research abstract for the firm's prostate cancer drug OGX-011 was released online in advance of the ASCO meeting. The interim data from a phase II study showed OGX-011 plus chemotherapy boosted survival over chemotherapy alone in patients with advanced prostate cancer.

The stock is already the clear winner in the pre-ASCO trading derby. From $7.61 a share on May 14, OncoGenex shares jumped to $21.42 on May 22 -- a 181% increase.

The stock closed Wednesday at $20, which could be a signal that ASCO-focused traders are starting to take profits ahead of this weekend's data presentation.