Biotech Stock Mailbag: NexMed
Dan M. asks, "What's the story with Targacept (TRGT)?"
I love Targacept for its experimental depression drug TC-5214. The phase II data on TC-5214 that Targacept presented last October was phenomenal, and it led to the signing of a monster partnership with AstraZeneca in December.
TC-5214 is going to be a huge drug in the depression treatment market. The problem for a lot of investors looking at Targacept today is time -- there's too much of it between now and when AstraZeneca and Targacept plan to start the first phase III study of TC-5214 in the middle of the year.
My sense is that Targacept is viewed as being catalyst deprived, which is the kiss of death for a lot of investors who figure, 'why own a stock now if there's no trade-able event on the near horizon?'I can understand that sentiment, but I also know that Targacept at $20 a share and an enterprise value of $500 million is a total steal based on the blockbuster potential of TC-5214. Patience will be rewarded.
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