The News Flow in Brief at PropThink this Week

Shares of TG Therapeutics (TGTX) had a rough end to last week and a worse beginning to this week. But it was that weakness that we were buying into. TGTX develops two early-stage but promising oncology candidates that have great comparators ahead in development. Monday’s intraday bounce following our alert to PropThink subscribers was good for around 10%, but TGTX remains almost flat for the week.

Last week Medivation (MDVN) sold off as its closest development-stage competitor was acquired by Johnson and Johnson (JNJ). As shares dipped, PropThink called the action overdone and added to our position. The pressure let off, and we’re ahead by 3 points on the purchase. Here’s the bull thesis.

PropThink has been shorting the home healthcare space since the CMS started sniffing around these high-margin, government payer-driven businesses. We find Amedisys to be particularly overvalued in the space, and on Friday reiterated why AMED is an attractive short.

PTC Therapeutics (PTCT) IPO’d just last Thursday and was up 17% over the course of its first few trading sessions. But an ill-timed publication in PLOS Biology has raised questions about the company’s lead nonsense mutation targeting therapy ataluren. While we didn’t take a position alongside Mr. King’s column, this is one that we’ll be revisiting later this year as an inflectional event approaches. Getting short on Tuesday has been good for 10% into the end of the week. Here’s what’s going wrong for this fresh IPO.

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Isis Pharma (ISIS) has a strong contender among the triglyceride-lowering therapies in development. Amarin’s (AMRN) Vascepa looks a little paltry on efficacy next to Isis’ APOCIIIRx, but Isis has a long ways to go before we can talk about who will compete in the market. Here’s why we went long ISIS back in March, and why we’re anticipating quality returns from Amarin later this year.

Mr. Deryugin wrote that concerns over the sustainability of Tecfidera’s launch were unwarranted and suggested that the declining shares of Biogen Idec (BIIB) presented an opportunity, a 10% return by Friday’s close. No surprise given the market’s performance in early 2013, Biogen Idec is up 45% since last October shortly after PropThink launched.

The FDA accepted Durect Corp’s (DRRX) NDA for Posidur, which most investors have ignored as Remoxy took center stage in the last six months. The acceptance has set up a catalyst for DRRX early next year. Mr. Napodano laid out why he thinks DRRX is undervalued, and shares are up 16% since his report last week.

In connection with TGTX, BIIB, MDVN and AMRN, PropThink has taken a long position.