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"There's a bull market in insanity," said Jim Cramer on his "Mad Money" TV show Thursday, and
is the way to play it.
Treatments for mental illness have improved over the years, and at the same time, demand has grown, said Cramer.
As awareness has increased, the stigma that used to be associated with mental illness has faded.
Psych Solutions, a psychiatric hospital company, is a "safe, secular growth stock" that can't be hurt by a slowdown in the economy, said Cramer.
The company is growing organically, and through "disciplined" acquisitions -- its most recent being the mental health division of
Cramer said that Psych Solutions recently had a stock offering at $50, so "don't pay too much." But, the bottom line is, "if you want to catch the bull market in mental health -- and it is a huge bull market -- buy some Psychiatric Solutions."
A caller wanted to know which pharmaceutical companies are best positioned in the market for antipsychotic drugs.
, along with
and its drug Abilify, adding that he would "do a 'mon back* on Bristol."
Cramer also talked about
and its implantable drug delivery system for epilepsy, which he said might someday be used for the delivery of antipsychotic drugs, as well.
Pay Attention to Shire
Adult use of attention-deficit disorder (ADD) medications more than doubled from 2000 to 2004, said Cramer, and pediatric use has grown 70%.
In fact, he said, the use of ADD medications has grown faster than any other kind of drug except for those for rheumatoid arthritis.
The play Cramer likes from these data is
Shire Pharmaceuticals Group
( SHPGY). Shire makes Adderall XR, the "No. 1 drug" for ADD and attention-deficit-hyperactivity disorder (ADHD).
We have every reason to believe the strong growth in these drugs will continue, said Cramer. But, Shire is a "high risk" play because it is being sued by
( BRL) because Barr wants to make generic Adderall and Adderall XR.
"It's possible they settle with Barr and come to some kind of arrangement. It's possible they don't settle; it's possible they lose," he said.
No matter what, Adderall comes off patent in mid-2006. "So, if you want to bet on the success of Adderall, keep a short time horizon," said Cramer.
It's a "short-term bet on higher-than-expected sales growth of Adderall and Adderall XR in the next two or three quarters.
"When Adderall goes off patent, this play is mostly over," although Shire does have some promising products in the pipeline, Cramer noted.
But, "that's a different bet than the one we just made on Adderall. It's a more speculative, more risky investment."
Cramer also mentioned
( CEPH), which has a new ADD drug expected to come out in the second quarter of 2006.
Cramer thinks it could be a $500 million drug -- double what the market expects.
He recommended Shire as a play for the next six months and Cephalon as a play six months from now.
Cramer was bullish on
( HOKU) as a "Mad Money" investment. Hoku makes "proprietary" membranes for fuel cells and is profitable, he said.
And, with oil so high, fuel cells actually make economic sense, he said.
But, Cramer cautioned that "nobody really knows anything" about the stock. So, be careful, and "don't pay much above the closing price." Hoku closed Thursday's regular session at $7.60.
CFO Bob Hugin joined Cramer by telephone as a guest on the show. Cramer asked the CFO if his company was finally getting the respect it deserved.
Hugin said he didn't know, but said the company's prospects "never looked better."
Cramer wanted to know when Celgene's myeloma drug Revlimid, which was recommended for approval Wednesday by a Food and Drug Administration advisory panel, would actually reach the market.
Hugin said the FDA had set Oct. 7 as the date for a final ruling. "I only know of one case where the FDA has ever gone against the advisory committee," Hugin said.
When Revlimid is approved, the company will begin marketing the drug to doctors "very quickly thereafter," he said.
Cramer summed up the interview by saying, "this is a real company" that's making money, which now has the "biggest product in its history.
"While this stock is up 25 points, it's still not too late to do a 'mon back."
Cramer was bullish on
Martha Stewart Living Omnimedia
Whole Foods Market
Lincoln Electric Holdings
Illinois Tool Works
American Science & Engineering
RF Micro Devices
Buffalo Wild Wings
XM Satellite Radio
( XMSR) and
Smith & Wesson
Cramer was bearish on
( CMGI) ,
New Century Financial
Nam Tai Electronics
*For all you home-gamers, a 'mon-back opportunity means Cramer would back up the figurative truck and load up on a stock.
At the time of publication, Cramer was long UnitedHealth Group, EnCana, Yahoo! and Commerce Bancorp.
James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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