PropThink’s Lead Stories in Biotech
- On Friday, PropThink launched its database of Special Protocol Assessments, or SPAs. These trials are, in essence, a FDA-blessed measure to mitigate clinical efficacy risk (learn more by visiting PropThink’s SPA landing page) The database is a new and unique facet to PropThink, something that we’ve yet to see widely available elsewhere, and provides a novel launching pad for trading and investment ideas. In tandem, we published a number of case studies pertaining to SPA agreements, and the regulatory outcomes that followed.
The SPA database can be found here, and Dr. Aafia Chaudhry’s accompanying analysis can be seen in “Special Protocol Assessments: The Case Studies;” for sophisticated biotech investors, the takeaways are definitely worth digging into.
- The FDA has apparently altered its stance on Northera, Chelsea Therapeutics’ (CHTP) treatment for hypotension in patients with Parkinson’s Disease and other neurodegenerative conditions. PropThink wrote in December, when CHTP was under considerable pressure, that this might be the case. Getting in at the ground floor has been worth more than 100% upside, but even making a short-term trade on Wednesday (as our Premium Subscribers did) could have netted a quick 50%.
- Cornerstone Therapeutics (CRTX) is a thinly-traded specialty pharma company. Nevertheless, PropThink noticed some possible tender activity in December, which we noted to our readers. That speculation proved worthwhile this week when Italian pharmaceutical and a major partner of CRTX’s Chiesi Farmaceutici SpA made a bid to acquire the American firm at a handy premium. When we wrote on CRTX two months ago, it traded at $4.85; shares closed this week at $6.73, a 35% return for those who took stock of PropThink’s report.
- Last week, PCYC climbed 24% just days after PropThink’s report called this oncology developer a buying opportunity. We reiterated our positive opinion on the outperforming stock this week, and took a detailed look at the potential for an acquisition by Johnson & Johnson (JNJ), as well as the competitive landscape for lead candidate Ibrutinib
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- Raptor Pharma (RPTP) has been weak since a long-term rally peaked in mid-December. PropThink covered the trading opportunity on Monday, and thus far, the stock’s reversal has turned up 8% gains. We’re looking for a run into the April 30 PDUFA for lead candidate Procysbi.
- Questcor Pharmaceuticals (QCOR) has been a solid winner for those who took advantage of the meltdown last fall. PropThink got bullish then, calling the stock undervalued based on H.P. Acthar’s real potential. QCOR closed this week at $30.90, up more than 50% from the sub-$20 levels last September and October. Still, we estimate fair value in the high $30 or $40 range.
- InterMune’s (ITMN) been cash-rich for a while now after its latest capital raise, but the market isn’t giving the maker of Esbriet much credit. With a key development in the next month and a half, and the shares oversold, it may be time for a short-term trade. Long-term, we’re digging into the possibility for Esbriet to receive FDA approval, followed by commercialization in the U.S; a considerable step up from Esbriet’s ongoing launch in Canada and the EU.
- In the near- and long-term, a number of risks surround Optimer’s (OPTR) approved treatment for Clostridium dificile, called Dificid. We’d be avoiding this one for a while, and believe investors can find more compelling trades. OPTR was off 3% by Friday’s close.