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
TheStreet Open House

Zogenix: Three Shots At Run-Up Trade

Stocks in this article: ZGNX

NEW YORK ( TheStreet) -- Zogenix (ZGNX) is positioned to be a great run-up trade with three major catalysts on deck over the next three months. Better yet for a run-up trade, Zogenix has been largely off investors' radar screens.

All three of the Zogenix catalysts revolve around Zohydro, a long-acting formulation of hydrocodone for the treatment of moderate-to-severe chronic pain. Zohydro has two major benefits over other hydrocodone-containing chronic pain meds: 1) Less frequent dosing (twice a day versus 4-6 hours); and 2) It's not co-formulated with acetaminophen, which can cause liver injury when used at high doses over long periods of time.

If approved, Zohydro would be the first long-acting hydrocodone that is not combined with another pain-relieving drug. Existing hydrocodone-containing pain relievers generated about $3.5 billion in U.S. sales. Even taking a small slice of this large market, Zohydro sales could reach $500 million annually, according to Zogenix.

With a market cap under $250 million Zogenix represents a great opportunity for a run-up trade into three Zohydro-related catalysts.

1. The FDA drug approval decision date for Zohydro is set for March 1, 2013.

2. Zogenix had stated that they expect FDA to convene an advisory panel during the Zohydro review period. No date for the Zohydro panel has been officially announced but FDA has set aside Dec. 7 as a tentative date for the next meeting of the Anesthetic and Analgesic Drug Products Advisory Committee.

This is the advisory panel charged with reviewing pain drugs like Zohydro. If FDA makes this Dec. 7 meeting official, it sets up a very tradable catalyst within about 10 weeks -- generally the sweet spot for BioRunUp trades. Taking a long position in Zogenix now will give you a jump on traders who won't see the stock on their radar screens until the advisory panel is formally announced.

3. On Oct. 29-30, FDA is convening a meeting of the Drug Safety and Risk Management Advisory Committee. The meeting agenda focuses on the public health benefits and risks of chronic pain relievers that combine hydrocodone with other analgesics. Remember, Zohydro contain hydrocodone only, so it should not be brought up at this FDA meeting. However, if the safety issues and risks of other chronic painkillers are discussed, it could make Zohydro look much more attractive to investors. Zogenix shares could see a lift as a result.

Zogenix completed an equity offering in July 2012, netting more than $65 million and giving the company enough cash to last beyond the potential Zohydro approval and into commercial launch. Therefore, I don't see a lot of risk that Zogenix dilutes shareholders again during the run-up into the three catalysts mentioned above.

Messier is long Zogenix.

Mark Messier is the founder of BioRunUp.com, a subscription-based stock-trading web site. Messier enjoys spending time with his wife and two young boys and visiting his "home away from home" in Costa Rica.

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 17,195.42 +221.11 1.30%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,566.1380 +16.9120 0.37%

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