This Day On The Street
Continue to site
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

Biotech Stock Mailbag: Keryx, Amarin, ImmunoCellular

When Amarin reported first quarter results last month, the company reiterated its expectation for AMR101 approval "in the second half of 2012, and commercial launch in Q1 2013."

"If Amarin was confident about AMR101 approval on July 26, why would the company say it expects approval in the second half of 2012?" my investor friend asks. Likewise, she believes that if Amarin really thought AMR101 was going to be approved on July 26, the company wouldn't be guiding to a commercial launch six to eight months later.

Good points, I must admit, but I'm still predicting full approval of AMR101 on July 26. Perhaps with a bit less confidence, however.

Don F. writes, "I have to say you really hate ImmunoGen (IMGN - Get Report). What does 5% of $3 billion in sales of T-DM1 come out to for ImmunoGen? Not bad earnings for a small biotech company, is it? And a lot of small biotech companies have to sell out to get the money to keep themselves going."

I don't hate ImmunoGen, I just believe the stock at $14-15 overvalues the company's future royalty revenues and earnings from the breast cancer drug T-DM1 and its drug pipeline, which is still relatively early stage and unproven.

Reasonable people can disagree on valuation but at some point, the numbers do matter. I was at the ASCO meeting last week where T-DM1 grabbed a ton of media attention -- and rightly so -- for the benefit offered to breast cancer patients. But the stock market looks ahead and investors have very much accounted for all that good news in ImmunoGen's market value already.

It's also unfair to accuse me of hating ImmunoGen when I've written favorably about the stock and T-DM1 since 2008. ImmunoGen was trading around $4 at that time. I'm happy to have championed ImmunoGen early, before most investors knew about the potential for T-DM1. Absence a fundamental change in the story, I simply believe the best chance for investors to make significant returns in ImmunoGen have passed. I'll certainly be watching to see if any such changes take place.

Brett D. asks, "Anything new regarding ImmunoCellular Therapeutics (IMUC)? Not many of us like the fact they are propping up the stock price with Seeking Alpha, but there appears to be signs of real science taking place versus a pump and dump! Any thoughts since your last comments?"

ImmunoCellular has in the past, through its investor relations firm, paid writers for positive coverage of the company. Seeking Alpha has published some of these stories. ImmunoCellular also continues to be promoted by CEOCast, a stock promotions firm with a troubled past, according to stories published by Barron's.

I understand that small-cap biotechs find it difficult to attract attention from the media and investors, but paying for favorable coverage isn't a credibility-enhancing strategy.

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
AMRN $2.33 0.00%
IMUC $0.48 0.00%
IMGN $10.12 0.00%
KERX $11.45 0.00%
AAPL $124.75 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs