5 Drug Stock Winners of 2010

BOSTON ( TheStreet) --Biotech investors love the big score. No other sector but biotech offers investors the chance to pick up cheap or forgotten stocks that can turn hot and double, triple or even quadruple over the course of a year. (The reverse, unfortunately, also rings true. (See Five Drug Stock Losers of 2010.)

Investors made a mint this year if they were smart or lucky enough to own one of the following five drug stock winners of 2010.

No. 5: Questcor Pharmaceuticals

Steeply priced drugs sold to a very small number of patients and reimbursed by insurers equal big profits for drug companies like Questcor ( QCOR). Acthar Gel, which Questcor sells for more than $23,000 per vial, is used to treat a rare form of epilepsy that strikes a couple of thousand babies each year.

The stock: Questcor's stock price is up 195% this year through Dec. 2 because biotech and drug investors love growth. Questcor's earnings are expected to increase 55% this year and 47% in 2011.

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No. 4: Neurocrine BioSciences

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Promising data on a new drug to treat endometriosis and a strong partnership signed with Abbott Labs ( ABT) sparked a huge turnaround for Neurocrine ( NBIX) and helped erase the sting from a previous failed effort at developing an insomnia drug.

The stock: Neurocrine shares are up 195% this year as investors expect the start of phase III studies next year.

No. 3: Prolor Biotech

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Israel-based Prolor ( PBTH) is a drug delivery technology company developing superior or more convenient formulations of existing therapies. The company's lead drug is a human growth hormone designed to reduce the frequency of injections to as few as one every two weeks instead of the two to seven injections per week required today.

The stock: Shares of Prolor are up 200% this year as the company starts a phase II study of its human growth hormone drug.

No. 2: Inhibitex

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Inhibitex ( INHX) focuses its research efforts on drugs for fighting infectious disease, including shingles, hepatitis C and staph.

The stock: Inhibitex is up 205% this year, with growth driven mainly by investors anticipating results from a phase II study of the company's shingles drug FV100 that is due before the end of the year. An early study of Inhibitex's hepatitis C drug INX-189 will be released in the first quarter.

No. 1: Amarin

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Amarin ( AMRN) was the top-performing biotech/drug stock in 2010, returning a remarkable 284%, with a big chunk of that coming in a single day at the end of November. Only in biotech can a stock move so quickly from the D-List to red-carpet royalty.

The stock: Amarin owes its outstanding performance this year to the stellar results from a phase III study of its medicinal-grade fish-oil drug AMR101. Investors see billion-dollar sales potential in the drug, not bad for a company that was worth about $100 million at the beginning of the year.

--Written by Adam Feuerstein in Boston.

>To see these stocks in action, visit the 5 Drug Stock Winners portfolio on Stockpickr.

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Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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