This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Biotech Stock Mailbag: Orexigen Therapeutics

Stocks in this article: OREX VVUS ARIA CVM AVNR DSCO

Sarcoma is a $200 million to $300 million opportunity for 'rida, give or take, of which Ariad receives a double-digit royalty from Merck. 'Rida is a nice base for Ariad's valuation but the drug is largely baked into valuation already.

Ponatinib is more exciting because Ariad owns 100% of the rights. The drug is designed specifically to overcome the genetic mutations that confer resistance to current drugs used to treat chronic myelogenous leukemia. Data presented to date have been strong, positioning ponatinib as a potential best-in-class drug and a strong competitor to Novartis' (NVS) Tasigna and Bristol-Myer Squibb's (BMY) Sprycel.

A phase III study of ponatinib in second- or third-line CML is underway with enrollment expected to complete by the end of the year. Data from the study could be ready in the middle of 2012 and if positive, Ariad could be in a position to seek ponatinib's approval by the end of 2012.

If there's a snag to the Ariad story right now it's probably a lack of near-term catalysts to get ADHD-addled biotech investors excited about owning the stock RIGHT NOW. Merck is supposed to seek approval for 'rida in sarcoma sometime this year but the company hasn't been more specific. Meantime, the phase III study of ponatinib is more of a mid-2012 event.


Dan O. emails, "Hello Adam, I am a long-time member of RealMoney Silver and without doubt your insights are my most treasured reading. I have long followed Avanir Pharmaceuticals (AVNR) and would appreciate any updates you might share. One would suspect that something is askew at Avanir headquarters? Why would a stock with such promise act so sickly when it looks to have such potential."

Avanir is supposed to launch Neudexta in February as a treatment for pseudobulbar affect (PBA). Until the launch occurs and script data starts flowing, investors will probably be sitting on the sidelines. That's a fairly well-worn script in biotech investing these days. Drug gets approved, stock pops, then sells off on concerns about commercialization. Stock recovers and does well if drug sells well (Alexion Pharmaceuticals) or remains underwater if drug performs poorly (Vanda Pharmaceuticals.)

5 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,227.43 +158.56 0.93%
S&P 500 2,001.83 +29.09 1.47%
NASDAQ 4,620.6680 +72.8340 1.60%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs