The Amarin (AMRN) run-up has been in full swing this month. Recall that in June, Mr. King outlined why he expected a robust run-up into the FDA advisory panel for Vascepa in the Anchor indication. We’ve been keeping PropThink’s Premium members up to date on the stock’s price action since, and suggested entering or averaging down when the stock traded between $5.15 and $5.60 in late July and early August. With the stock overbought and momentum slowing this Friday, we sold a significant portion of our position around $7.30 from an average price of $5.60. The Vascepa advisory panel is still over a month away, so we’ll likely get more involved via options (October options expire after the Oct 16 advisory panel), or stock, as AMRN pulls back for another leg up.
We published on Wednesday a brief note that went out to PropThink Premium Subscribers last Friday suggesting a long position, via options or stock, in Isis Pharmaceuticals (ISIS) coming into the weekend, given what we expected would be positive trial results for ISIS-APOCIIIRx. As many expected, the antisense therapeutic successfully reduced triglycerides and Apo C-III in patients with severely high triglycerides. We covered our Sept 28 calls, purchased on Friday, for a gain of 70% in less than three trading sessions.
We began building out a position in Orexigen (OREX) last week and reiterated the same to PropThink’s Premium readers this week as the 50-day simple moving average continued to hold up as support; on Friday, we were pleased to see the stock recover rapidly from a dip below the trend line. Orexigen will release interim results from the large cardiovascular safety trial of the weight-loss drug Contrave, the Light Study, in early December. The results are key for Orexigen as the FDA has agreed that these results, if positive, can support the submission of a New Drug Application. At the end of last year, PropThink called Orexigen “the obesity stock to own in 2013” – OREX is up 33% YTD; VVUS and ARNA are down 19% and 30%, respectively, in the same time period.
Don’t miss a thing with PropThink Premium. We deliver long, short, and actionable research to our Premium members on a regular basis. Best of all, you can try it free for 30 days. Sign up here.
Our open conference call with Sunshine Heart CEO David Rosa this past Tuesday was both well-attended and well-received. Mr. Rosa revealed for the first time publicly a new potential indication for the company’s fully implantable C-Pulse device and provided some insight into patient mortality in a previous pilot trial – a facet of the company’s development history that has raised questions among savvy investors. We’ll be announcing similar calls with quality, emerging healthcare companies in the near future, and to stay up to date you can visit us at PropThink.com regularly or follow us on Twitter. For those of you who couldn’t make the call, here’s the transcript (special thanks to Seeking Alpha for the quick turnaround). Since we first spotlighted SSH as an undervalued emerging story, shares are up over 100%, and we remain optimistic about continued appreciation through the end of the year.
MiMedx Group (MDXG), a developer of advanced wound-care products, had an ugly update for investors this week, although it was the FDA that made it public. The regulatory agency delivered an Untitled Letter to MiMedx citing concerns that its injectable amnion products are being sold without an approved Biologics License Application. MiMedx disputes the allegations, but MDXG dropped as much as 70% when the letter was posted on the FDA’s website, bouncing back from a low of $1.81 to close the week at $4.20, down 30% from Tuesday. PropThink has had an eye on MiMedx for quite some time given a convergence of red flags, undiscussed risks, and a rich valuation. Read the details.
ChemoCentryx (CCXI) turned out to be one of our worst picks this year, down 40% since Mr. Deryugin highlighted the experimental Crohn’s Disease drug, vercirnon, on August 5. After some reevaluation, he’s holding his shares ahead of an interim read-out for CCX140, a developmental treatment for diabetic nephropathy, and a licensing decision on CCX168 from GlaxoSmithKline. Here’s his update, which cites some early evidence that the chemokine receptor antagonist could work in a notoriously difficult-to-treat population.
This week Pozen (POZN) delivered on one of its key goals in 2013 – securing a partner for its “safer aspirin” PA-325/40. Mr. Napodano thought the company so undervalued back in May that he pounded the table on his “buy” recommendation. With the announcement of a licensing agreement with Sanofi (SNY) on Wednesday, shares ended the week at 25% premium to Mr. Napodano’s recommendation earlier in the year. Nevertheless, he’s still bullish on the name and considers shares significantly undervalued.
In connection with CCXI, SSH, OREX, and AMRN, PropThink has taken a long position.
