PropThink readers who followed us into Enanta Pharmaceuticals (ENTA) in July saw their money double through this week.
AbbVie (ABBV), which uses an Enanta-developed hepatitis drug (the protease inhibitor ABT-450) in its own multi-drug hepatitis-C regimen, reported this Tuesday that the phase 3 SAPPHIRE-II study, the second of six phase 3 studies being conducted by AbbVie, demonstrated that the regimen generated a sustained virologic response at 12 weeks post-treatment (SVR12) of 96% in a particular subset of hepatitis-c patients. ENTA closed the week up 33%. While we’ve taken most of our profits off the table, we’re letting a portion ride through further data read-outs in 2014.
Comments from the Director of FDA’s Center for Drug Evaluation and Research (CDER), Janet Woodcock, sent shares of Sarepta Therapeutics (SRPT) climbing this week, making our November 12 purchase of the stock quite profitable. We took some money off the table at a 35% profit. It was the same commentary from Muscular Dystrophy advocacy groups and FDA officials like Woodcock that contributed to the move higher, then eventual plummet, in SRPT this fall. We’re hesitant to put much weight on Woodcock’s comments but are willing to own SRPT on the off-chance that the FDA makes some changes to their eteplirsen guidance. Read more here.
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This week, PropThink revisited Alcobra Pharma (ADHD) with PropThink Premium members, suggesting that the stock was worth a buy. ADHD popped 10% in the days following our note before retracing amidst a week biotech tape. ADHD has two major catalysts in 2014, and $16.50 is an attractive place to buy the stock ahead of a pivotal year; ADHD ran an equity financing in October where institutional investors would have bought the stock in the same range. ADHD should have data from a phase 2b study of its lead drug, Metadoxine ER, next week, but more importantly, we believe this stock could be a top biotech play in 2014. We’ll have more to say as the new year rolls around.
After the close on Friday, Stem Cell Therapeutics (SCTPF) (SSS.V), a small Canadian biotech company, announced in a press release that it had raised net proceeds of $31.9 million from a private placement of stock. Of note are some healthcare funds who were involved in the deal, and the size of the deal in relation to this company’s $12 million valuation on Friday.
Generally we don’t comment on penny stocks, but SSS.V is intriguing because it’s the only publicly traded company developing an anti-CD47, which we discussed with PropThink Premium members in October. The CD47 protein (known as the “don’t eat me” target) has received considerable press in 2013 due to research coming out of Stanford University, spearheaded by Dr. Irv Weissman. Attention on the target will be a major windfall for Stem Cell Therapeutics as more data emerges. Here’s a brief on CD47 from the Stanford School of Medicine.
On Thursday, Coronado Biosciences (CNDO) announced that an early study of its lead therapeutic asset, TSO (Trichuris suis ova, CNDO-201, or whipworm eggs), demonstrated some signals of efficacy in autism. While we have some real questions about the study, and CNDO has not been a winner for its investors, we did some bottom-feeding and scooped a few shares as the stock trades well below cash. While this may take some time to play out, we suspect that increasing attention early in 2014 could bring this equity in-line with its cash position.
