This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

Biozone: A Little Biotech Setting Up for Big Gains

Stocks in this article: BZNE

NEW JERSEY ( TheStreet) -- When successful, buying into early-stage biotech stocks can be very rewarding and can produce triple-digit returns. But it can also be extremely risky. It is important to make an early effort to locate guideposts for one's investment thesis and identify catalysts for significant moves. All of the signs are in place for this type of move in Biozone Pharmaceutical (BZNE), perhaps even by year-end.

Understanding Dr. Phillip Frost's recent deal-doing with Biozone and others helps make this clear.

Over the past few years, Frost's Opko Health (OPK) has been on an acquisition frenzy. This has led the stock to double in the past year. Last week it finally hit $10.00. The company now sports a market cap of nearly $4 billion. Frost's initial purchases were when it was a bulletin board stock trading at below $1.00. But even investors who bought last year have more than doubled their money.

This performance has defied occasional skeptics over the past year, including me. But now, even the skeptics appear to have been converted.

Prior to Opko, Frost's most notable transaction was the sale of Ivax to Teva (TEVA) for $7.6 billion. Frost's deal-doing looks very much set to continue.

Earlier this year, Opko acquired Prolor Biotech. Frost was already a substantial holder in Prolor before the acquisition. Prolor had been trading at below $5.00 when Opko announced that it would be acquiring the company for stock. Opko ended up owning Prolor and Frost simply ended up owning more Opko stock. By the time the deal closed, Prolor traded up to $8.23, making for quick gains of 60%.

Frost's SafeStitch Medical was trading for just 25 cents a share earlier this year. The stock recently hit $1.50 and has stabilized at around $1.30, with a market cap of $230 million. In September, the company completed a merger with TransEnterix. Even though the stock has already risen by 4 to 6 time in 2013, there could well be significant upside remaining. However, it makes sense to hold off until the results of the merger start to become apparent.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

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