This Day On The Street
Continue to site
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

Lessons From Biotech's Best Third Quarter Stocks

BOSTON ( TheStreet) -- The 10 best-performing biotech and drug stocks in the third quarter, according to CapitalIQ:

10. Celsion (CLSN - Get Report) 77%
9. Xenoport (XNPT) 90%
8. Peregrine Pharmaceuticals (PPHM - Get Report) 90%
7. Sunesis Pharmaceuticals (SNSS) 96%
6. Opexa Therapeutics (OPXA - Get Report) 111%
5. Stemcells (STEM - Get Report) 154%
4. Catalyst Pharmaceuticals (CPRX) 185%
3. Hemispherx Biopharma (HEB) 188%
2. Sarepta Therapeutics (SRPT - Get Report) 313%
1. Savient Pharmaceuticcals (SVNT) 363%

Some lessons and observations from this list:

1. The biotech stock bubble grew bigger. StemCells up 154%? Irrational exuberance is reaching the red line any time a stem-cell company performs this well.

The same can be said for Opexa, a dead-ender that's burned through piles of shareholder cash on the futile development of the multiple sclerosis drug Tovaxin. It seems like some investors forget that Tovaxin failed a key phase II study in 2008. Tovaxin has toiled in purgatory ever since, although Opexa did change the drug's name to Tcelna. No doubt, the name change is worth millions in additional market cap.

The biotech sector is up almost 40% for the year, outperforming the broader stock indices. Warning: Stock market bubbles don't last forever. Success and easy profits are swelling the heads of traders who believe that all biotech stocks, no matter the quality, always go up. Judging by some of the biotech dreck on the list above, the sector is getting too frothy for its own good.

2. The "run-up" trading strategy is working. Hemispherx, Catalyst and Celsion owe their places on the third-quarter top returns list to traders buying ahead of key catalysts. For Hemispherx, it's a Dec. 20 FDA advisory panel for the chronic fatigue syndrome drug Ampligen. [I'm no fan of Ampligen for reasons explained <a href="">here</a>.] Likewise, Catalyst and Celsion are expected to release important results from respective late-stage clinical trials in the fourth quarter.

3. Sarepta was the feel-good story of the third quarter and it may reach rapturous levels later this month. On Monday, Sarepta shares rose another 6% on speculation over the meaning of this online registration form for a symposium to be held at the World Muscle Society meeting -- the venue for the presentation of 48-week data from the phase II study of eteplirsen in Duchenne muscular dystrophy.

I can't recall a more highly anticipated biotech event than the looming announcement of the eteplirsen data.
1 of 2

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
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CLSN $1.48 -3.90%
CPRX $0.62 1.20%
PPHM $0.33 0.48%
OPXA $2.40 1.30%
SRPT $17.00 1.40%


Chart of I:DJI
DOW 17,641.30 -19.41 -0.11%
S&P 500 2,044.44 -6.19 -0.30%
NASDAQ 4,693.2580 -23.8360 -0.51%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs