These trades aren’t over yet, and you can catch up on the fundamental theses at PropThink.com. Below, our weekly recap.
Shares of Biodelivery Sciences (BDSI) came close to making new all-time highs this week, less than 10 days from a FDA approval decision for BUNAVAIL, the company’s treatment for opioid dependence. In February, the company closed a $60 million stock offering, days after we explained to PropThink Premium subscribers why the market would reward BDSI for getting a financing out of the way. Sure enough, the stock made new 52-week highs a month later (up nearly 100% since we suggested the stock in December). BDSI dropped as low as $6.71 in April as the sector experienced a hard correction., but has rallied nearly 50% to top $10.00 in the month-and-a-half since.
We’ve identified another stock poised to make a similar move, and will alert PropThink Premium subscribers when we think it’s time to pull the trigger.
Retrophin (RTRX) on Thursday afternoon announced the in-licensing of another orphan drug product, increased its 2014/2015 revenue guidance, and secured much-needed financing in the form of $80 million in convertible debt. The stock jumped 25% in trading on Friday before fading through the afternoon. Early this week, we outlined to PropThink Premium subscribers what to look for from Retrophin in the nearterm; the deal wasn’t a surprise to anyone following the story. Although there are questions to be answered about Thiola (tiopronin), a treatment for cystinuria owned by Mission Pharmacal and now out-licensed to Retrophin, RTRX is pulling pages from the Questcor (QCOR) playbook and its own strategy with Chenodal, planning to increase the price of Thiola to bring it in line with similar/competing products. With an estimated 20-40K patients in the U.S., it doesn’t take an exhaustive commercial effort to make this a profitable endeavor. But that’s the question on most investors’ minds – can Retrophin successfully execute on a growing list of to-dos? On Monday, we outlined why we’re willing to bet on this young company. After some reader inquiries, we put together commentary this week on Ventrus Pharmaceuticals’ (VTUS) move to merge with privately held HBV drug developer, Assembly Pharmaceuticals. VTUS caught the momentum bug mid-week and climbed nearly 50% in just a few days. Through the merger, Ventrus – to be renamed Assembly – is joining a handful of publicly traded biotech companies targeting HBV that attained significant valuations despite very early-stage pipelines: namely, Arrowhead Research (ARWR), which made waves (+1100% in 2013) on animal data alone. Read more here. This weekend also kicks off ASCO 2014, a major medical meeting for industry, oncology professional and investors. For those just catching up, read PropThink’s ASCO preview and followup from this month, and keep a close eye on Twitter in the next few days as the biotech investing community will be breaking news alllll weekend.
For those not attending ASCO or glued to the news stream, have a relaxing weekend!
One or more of PropThink’s contributors are long RTRX or BDSI.
