In Review: PropThink’s Lead Stories from the Week

  • We continued to add to our Interview collection, posting discussions this past week with the CEO’s of both AdventRx Pharmaceuticals and ARIAD Pharmaceuticals.
  • Our final thesis on Peregrine Pharmaceuticals? Stay away. Regardless of a unique options strategy for this battered stock, we believe your capital can be put to work more profitably elsewhere.
  • ARIAD reported positive results for its early-stage pipeline candidate, AP26113, and the excitement for this ALK/EGFR inhibitor helped the shares close the week at a new 52-week high. ALK inhibitors are now seen as one of the “hot” classes of cancer treatments.
  • We were the first to note that QCOR shares are starting to look attractive again, as the bad news is largely price into the stock, and short sellers are getting more pressure on the rising expense of borrowing shares.  At the end of the week, Oxford Health surprised investors with their policy change on Acthar Gel, and we think the outcome is positive. A good read for over the weekend, as we think the shares will continue to run higher on Monday.
  • An article by the London Times suggests Roche may be eyeing ILMN again, and we agree that this “rumor” has legs. Since it was speculated that LIFE might get a bid from Roche, we assumed LIFE could trade down as a result. ILMN did trade up. LIFE lagged for a while, but ended the week higher.
  • We noted that VTUS is sharply undervalued given the positive Phase III trial for its anal fissures product, and what seems to be a favorable discussion between the company and FDA on how to go forward on a Phase III program. In addition to this article, you can see our interview with Ventrus CEO Russell Ellison here.
  • In front of Sunesis’s Analyst Day, we reviewed elements of the Bull story for lead asset, vosaroxin, and noted that the stock was getting close to Analyst’s price targets. We speculated that price targets could rise after the event, given that no Analyst would want to spoil the fun and the chance of Phase III success for vosaroxin looks strong. No less than three analysts raised their targets after the event – one just beforehand – and the stock had a good ride, blowing through its 52-week high.
  • Our “clunker” call of the week was looking for ENDP to bounce after it lowered financial guidance on its Analyst Day; the stock lost about 4.2% since Thursday’s event. Perhaps we were being a little too contrarian, but we continue to hear that investors like the stock’s cheap price. We are not giving up on this one on a longer-term basis, and while some Analyst downgraded the stock, price targets remain in the mid-to-high $30 range.
  • The lack of clarity on the merger between BPAX and ANI, a private drug company, caused us to speculate on the value of the transaction. Given the “black box” of information, we drew a line in the sand at $1.25, where we believe investors could look to support the deal. More information will come out when merger documents are released and investors have the chance to vote on the deal. Meanwhile, it will take a discounted price for us to get involved.