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!

ASCO: Traders Love Speculative Cancer Stocks

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

BOSTON (TheStreet) -- Every spring, a few cancer-related biotech stocks catch fire in a momentum-fueled sprint to the big American Society of Clinical Oncology (ASCO) annual meeting in June.

Oxigene (OXGN), rocketing more than 300% in the past month, is the hot ASCO stock of 2011. But can it last?

A quick run up followed by an equally speedy run down is what often happens to biotech stocks gripped by the "ASCO effect." For a growing segment of investors, the ASCO annual meeting is a trading event that comes and goes every spring. It's fun and profitable while it lasts, but the festive atmosphere retreats as quickly as it starts.

Oxigene is a small, cash-strapped drugmaker that isn't expected to make much of a splash at the big cancer research meeting. But the stock is nonetheless performing exceedingly well because traders like Oxigene's penny-stock market cap of just under $30 million, the low float of 5 million shares and the simple fact that Oxigene will have a presence at ASCO.

The same can be said for Vical (VICL), Oncothyreon (ONTY), Cyclacel Pharmaceuticals (CYCC), Synta Pharmaceuticals (SNTA) and Sunesis Pharmaceuticals (SNSS). All are similar micro-cap biotech stocks that have traded higher in advance of the ASCO meeting. A new crop of biotech stocks may also run up now that ASCO released cancer drug research abstracts Wednesday night.

No other drug stocks, however, have moved like Oxigene, which was trading in relative obscurity just one month ago. Shares were worth about $1.50, and daily volume rarely exceeded 250,000 shares. All that changed on April 18, the day ASCO released on its Web site the titles of research abstracts to be presented at its June annual meeting. Those abstract titles included two from Oxigene related to its cancer drug Zybrestat.

On May 2, Oxigene closed at $2.25 on volume of 2.2 million shares. On May 6, Oxigene closed at $3.56, doubling its price in two weeks of trading. Oxigene zoomed past $4 a share on May 11 with volume exceeding 16 million shares or more than three times its float. Two days later, Oxigene hit an intraday high of $6.38 before closing at $5.24, again on extraordinarily high volume. The stock closed Wednesday at $5.14.

A remarkable performance by any measure, especially considering Oxigene was one of the worst-performing biotech stocks in 2010, beset by concerns about its cancer drug pipeline, management turnover and a paucity of cash on its books. Oxigene was forced into a reverse stock split in February.

Oxigene's experimental drug Zybrestat belongs to a class of cancer drugs known as vascular disrupting agents (VDAs) that are designed to target and destroy blood vessels within tumors, thereby depriving them of oxygen and nutrients. VDAs are supposed to work against existing or more mature tumor blood vessels, compared to anti-angiogenesis inhibitors like Roche's Avastin, which work by preventing tumors from developing new blood vessels.

At this year's ASCO meeting, a final survival analysis will be presented from the "FACT" phase II/III study of Zybrestat in patients with anaplastic thyroid cancer (ATC). The median overall survival for patients treated with Zybrestat and chemotherapy is 5.2 months compared to 4 months for patients treated with chemo alone. This equates to a 35% reduction in the risk of death favoring Zybrestat, although the survival benefit is not statistically significant, according to a research abstract released Wednesday evening.

While the survival trend is positive, the Zybrestat result is no different than what Oxigene reported from an earlier survival analysis from the same thyroid cancer trial last September.

These data are not good enough to allow Oxigene to seek regulatory approval for Zybrestat. In March, Oxigene said it must conduct a new clinical trial of Zybrestat in thyroid cancer following a meeting with the U.S. Food and Drug Administration.

When it comes to ASCO-related stock trading, however, the data aren't as important as the speculation about the data. On that latter score, Oxigene and the investors who traded the stock have done very well.

-- Written by Adam Feuerstein in Boston.



>To contact the writer of this article, click here: Adam Feuerstein.

>To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein.

>To submit a news tip, send an email to: tips@thestreet.com.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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!
DOW 17,086.63 -26.91 -0.16%
S&P 500 1,987.01 +3.48 0.18%
NASDAQ 4,473.6970 +17.6810 0.40%

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