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Why Expect More Price Swings From These 4 Biotechs

Crish Lau, Kapitall Contributor  Companies in the biotechnology space are often trade like speculative investments. Speculation for FDA approvals may lead shares higher. Profit-taking often follows after companies gain approvals, as investors move on to focus on operational costs and product sales.

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4 companies that rallied significantly and are selling-off in the short term are a starting point for investors. 


1. Keryx Biopharmaceuticals Inc. ( KERX):  Rallied in late-January 2012 by over 40%, from positive results in its experimental kidney disease drug. Keryx reported that phosphate levels in blood were reduced in subjects, meeting its late-state trial goal. Since trading up to as high as $10, shares plunged after the company offered 8.2M shares at $8.49. The offering will raise as much as $80.4M. Keryx traded recently at around $6.70.

Focuses on the acquisition, development, and commercialization of pharmaceutical products for the treatment of life-threatening diseases, including cancer and renal disease. Market cap at $529.06M.


2. Oncolytics Biotech Inc. ( ONCY): Traded above $4.50, but closed recently at $3.96. Preliminary results for Reolysin showed the treatment was safe and well-tolerated. The drug is used to treat metastatic colorectal cancer. The company priced its 8M share offering at $4, which was around 15% lower than a previous-day closing price. The funds will be used for clinical-trials and manufacturing-related activities.

Focuses on the development of oncolytic viruses as potential cancer therapeutics. Market cap at $290.73M.

3. VIVUS Inc. ( VVUS): Shares peaked at $30 in late-July 2012 but closed at $12.58 recently. Vivus said that the European Medicines Agency recommended against approving Qsymia. Earlier in February, shares were trading higher because the company said Qsymia helped in weight loss.


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