This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Biotech Stock Mailbag: Delcath, Navidea, Affymax, Ziopharm

Stocks in this article: DCTH NAVB AFFY TGTX ZIOP

Outside the clinical data package for Melblez, Delcath management is displaying a significant lack of confidence with its non-stop dilution of shareholders via At-The-Market (ATM) equity offerings. The company announced another $50 million ATM on Wednesday night.

Allen N. asks, "Did you notice Navidea Biopharmaceuticals (NAVB) got OK'd by the feds today? Any comment?"

FDA approved Navidea Biopharmaceuticals' lymph node mapping agent Lymphoseek on Wednesday. The approval was expected but did come early. Navidea shares fell on the news, which caused some consternation and furrowed brows among the bulls. Any FDA approval is a positive, but Navidea fans fail to recognize Lymphoseek's small commercial potential relative to the company's super-sized market valuation. This disparity, more than anything, explains why Navidea is selling off on the Lymphoseek approval.

Lymphoseek is only going to generate $20 million to $40 million in revenue for Navidea, by my calculations. I realize the company's own revenue forecast is significantly higher, I just don't believe it. I discussed Lymphoseek's commercial sales model in detail last September.

On Wednesday's conference call, Navidea set Lymphoseek's price at $300, which is below the $400 I was assuming. That's still a significant cost premium to cheap blue dye, which is what doctors and hospitals use today for lymphatic mapping procedures in breast cancer and melanoma patients. Lymphoseek works, no doubt, but does it work that much better than blue dye or other similar lymph node mapping agents to justify a higher price? I don't believe it does. But, again, even if you assume wholesale switching from blue dye to Lymphoseek, the numbers still don't pencil out in Navidea's favor, especially given the revenue-sharing agreement with Cardinal Health.

Navidea may have been able to differentiate Lymphoseek from current standard of care had FDA approved it for "sentinel" lymph node detection. FDA, however, did not grant that broader approval. For savvy investors, this was another reason to sell the stock Wednesday.

I rehashed a lot of my thinking about Navidea on Twitter Wednesday, which prompted a discussion with @bracketanalytix. He tweeted:

"Can't you even write something new? The hardest thing to detach from is your own beliefs."

My response: "Since I already assumed Lymphoseek approval (which came today), why would the 'low sales' thesis change?"

3 of 4

Select the service that is right for you!

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 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • 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