PropThink’s End-of-Week Recap

We spent the week in San Francisco for the JP Morgan and Biotech Showcase conferences, which proved invaluable for idea generation, networking, and the solidifying of some in-process stories. We’ll have more to write in the coming weeks, and suggest the conference for all of those interested in life science investing. 

  • Affymax picked up another crucial supply agreement for its recently launched Omontys, and has been improving sales channels since our coverage began in December, returning 8% thus far. Nevertheless, this is a long-term story.
  • Keryx Biopharmaceuticals’ Japanese partner, JT Torii, filed a new drug application for Zerenex in Japan. The filing bodes well for KERX shareholders, who wait with bated breath for any news on Zerenex’s Phase III data in the U.S. An options strategy may be best-suited.
  • It’s been cheap for a long time, but following SciClone’s latest financial guidance, the  company is set up to continue moving higher. SCLN gained 16% since our first story in November. Also, see our interview with SCLN CEO Friedhelm Blobel.
  • Jason Napodano organized his notes from meetings with management around the JPM Healthcare Conference. This one’s a particularly good update for those that follow Jason’s biotech coverage.
  • ILMN managed to rally through the end of the week despite Roche taking a long-rumored buyout off the table. Some positive press negated our negative expectations.
  • PharmAthene announced that litigation with SIGA Technologies may finally be coming to an end, which could prove lucrative for the small biodefense developer. Our story aired on Friday morning, and the stock closed the day 17% higher. If PIP comes out the winner, which seems likely, the stock should pop even higher.
  • BMRN has performed well since PropThink covered the stock just before the new year. Driven by an expanding product portfolio, 2013 could be a good year for BioMarin and its shareholders.
  • It’s hard to find a Celgene detractor out there, and this week the stock climbed 17% around the company’s presentation at the JPMorgan Healthcare Conference. PropThink wrote about the company on Tuesday, and we still see promise for CELG with a number of catalysts in the first part of this year.
  • ENDP has finally aired out all of its dirty laundry, suggesting that new money will begin to enter the stock. All of the nitty gritty details can be seen in PropThink’s full thesis.
  • Levadex could become a groundbreaking product in the migraine space. MAP Pharma’s stock price is beginning to reflect that optimism, as the FDA will decide whether to approve Levadex in April. Nevertheless, the stock made little move this week.

A Brief PropThink Performance Review – more details to come

  • Excitement began building in Organova at the back end of 2012. We got out in front of that momentum, and ONVO has since gained 51%.
  • Oncothyreon shares have recovered nearly 25% since their demise late last year, which we called a buying opportunity.
  • PropThink nailed the Celsion run-up. Since November, shares of the Thermodox developer are up 85%. We remain reticent to hold through the data release, however, which is expected by the end of this month.
  • Orexigen has climbed 15% since PropThink opined that the company may be the best weight-loss bet in 2013.
  • A PropThink pick from way back in mid-2012, Pain Therapeutics, proved a flop in the long-term, although it started off with decent returns for investors. Mr. Napodano noted that the Pfizer-related sell-off created opportunity for DRRX, which could translate to PTIE as well.
  • Just this week, ARQL, which we called an “inexpensive opportunity” in mid-December, dropped on poor tivantinib data. Nevertheless, the stock isn’t substantially below where we released our opinion, and we’re keeping an eye on the company for its solid balance sheet and broad pipeline.
  • Cadence Pharma’s investor day in early December highlighted the growth trajectory for Ofirmev. We took interest in the company then, and shares have since climbed 27%.
  • ALXA traded off 12% immediately following PropThink’s report in December, and despite a rally along with Adasuve’s approval later in the month, the stock moved down again. As a short-term trade, ALXA proved profitable, and our valuation suggests more downside in the long-term.
  • As mentioned above, PropThink’s article on PIP Friday morning could have returned a swift 16% by the close.
  • The NuPathe pre-approval run-up didn’t climb as high, or last as long, as hoped, primarily because we opined on the upside of the trough. Those that got in a week earlier made out well, although PropThink readers had a fair shot at a 13% return.
  • PropThink noted AVEO’s low valuation in late December. The stock has climbed 11% since.

We expect to release a more detailed look at PropThink’s performance sometime in the first quarter.

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