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!

A Tale of Two Biotechs Under $10

Stocks in this article: ONXX SGMO DNDN JNJ MDVN

NEW YORK ( TheStreet) -- What oil was in the 1930s, biotech is now.

It's a world of wildcatters, only instead of searching for huge pools of oil underground, these wildcatters are trying to bring lifesaving drugs to market, worth billions of dollars. Better yet, families of drugs.

The payoff is usually a buyout by a larger company, as with Onyx Pharmaceuticals (ONXX), now studying buyout offers in the wake of its success with Nexavar, an anticancer drug.

Through the 20th century, and again from 2002-2003, Onyx traded for less than $10. Following the rejection of an offer from Amgen (AMGN), it's now trading at about $127 a share.

This was also the dream of Dendreon (DNDN), one of the first stock stories I began following closely upon moving from a tech to a finance beat in 2011.

Dendreon makes Provenge, a drug for prostate cancer, and back then it was a $40 stock, with bulls like Dr. Theodore Cohen pounding the table for it in commentary on the Internet.

As I wrote at the time at Seeking Alpha, I was skeptical about Dendreon, noting that management was asking insurers to pay $93,000 for a treatment that was shown to extend the life of late-stage cancer patients by just a few months.

Bulls such as Dr. Cohen called that view ghoulish, and maybe it was, but allowing any unlimited draw from a limited pool of funds is a game that's bound to end in tears, as I noted in my comments.

The good times ended in August, 2011, as our Adam Feuerstein reported, over reimbursement issues. Now, with the stock trading for less than 5, the bears are getting their turn, with one asking in an online commentary recently whether it's time to give up on the stock.

While hopeful about sales in Europe, the fact is Dendreon now faces two competitors, Johnson & Johnson's (JNJ) Zytiga and Medivation's (MDVN) Xtandi.

Back when Dendreon fell, Sangamo Biosciences (SGMO) was selling for about $4.50 a share. It's now more than double that, at more than $9.50, on a class of drugs called ZFPs, which can be used to modify DNA sequences to turn genes on or off. (Even at its current price, Sangamo's market cap is less than that of Dendreon.)

1 of 2

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 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

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