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NEW YORK (
TheStreet) -- My colleague Adam Feuerstein deserves kudos for his ability to deliver both high quality and an astonishing quantity of biotech stock picks. Although I'm not as prolific, I have written 40 columns for
TheStreet this year, including 12 clear-cut "buy" or "sell" recommendations and a handful of "stay on the sidelines" calls that urged shareholders to sell existing positions.
Let's take a look at how my ideas have fared.
The Longs: B+
I've done pretty well on the long side this year, with my reluctant acknowledgement of the bull case for
Peregrine Pharmaceuticals(PPHM) as the only major blemish. My
first column on Peregrine concluded: "I'm very skeptical of the results." After talking to several bulls at a conference the next week, I foolishly ignored my initial instincts and wrote, in a
follow-up: "I'm still a bit hesitant, but risk-tolerant investors might reasonably consider modest long exposure." Dumb move.
A few weeks later,
Peregrine turned out to be a disaster of the highest order when management revealed "major discrepancies" in the company's Phase II trial for bavituximab in non-small cell lung cancer (NSCLC). Even though I never expressed conviction, I should have known better than to offer even tepid support.
The rest of the longs look pretty good.
Onyx Pharmaceuticals(ONXX) has been a success (+104% since my
recommendation in mid-March), even though the stock has struggled a bit over the past month. Kyprolis -- the brand name for Onyx' carfilzomib, which received FDA approval in mid-July for the treatment of late-stage multiple myeloma -- has easily exceeded Wall Street's expectations so far. I expect Kyprolis sales will continue to grow rapidly, despite the recent positive data from
Celgene's(CELG - Get Report) pomalidomide in a similar treatment setting. Although pomalidomide will likely receive FDA approval by mid-February 2013, the multiple myeloma market doesn't strike me as "winner take all" dynamic and Onyx still feels like a good stock to own. Nonetheless, investors should watch closely for shifts in physician enthusiasm about Kyprolis at the annual American Society of Hematology (ASH) meeting next month.
Sarepta Therapeutics(SRPT - Get Report) has been a huge victory. My
first article, written in mid-August, highlighted some red flags to keep an eye on, but recommended buying the stock. Even though shares have declined from the post-phase II data peak in early October, my Sarepta recommendation still produced a +189% return in three months. Not bad.
I'm convinced eteplirsen works and will be approved for the treatment of Duchenne muscular dystrophy (DMD; a progressive disease that leaves patients wheelchair bound by their teens and dead shortly thereafter). I'm less sure about the timing. Management will have an "end-of-Phase II" meeting with the FDA within the next few months, and mega-bulls expect the company to file for and receive accelerated approval shortly thereafter, based on the existing data. I think that's possible -- there will be enormous pressure to approve the drug from patient advocacy groups -- but it's far from a sure thing. Either way, Sarepta's market capitalization remains a modest $747 million and the company has global rights to a drug that could easily be a commercial blockbuster and a platform that could yield additional drug candidates at reduced risk. There's still plenty of upside.