This Week’s Top Stories in Biotech

  • Jason Napodano laid out the DRRX investment thesis. Will Pfizer re-file the Remoxy NDA? And what about Posidur? They’re both real value drivers for DRRX, and under the right circumstances, investors could be looking at a double catalyst early next year. The story brought in a quick 6% trade on Tuesday.
  • PropThink’s subscribers jumped into the AMED short last week (good for 9%) when shares were in the mid-teens. While the stock stabilized this week just above $10, the long-term short thesis is compelling.
  • Traders got behind MediciNova when the FDA granted the company fast-track status for  one of its development programs. The momentum brought in a fast 80% return for those in at the ground floor, but this company is in desperate need of cash and we suspect an equity financing is around the corner, if not going on already.
  • Is Takeda interested in Aastrom Bio? It’s an interesting thought following Napodano’s sleuthing, which turned up some compelling evidence. ASTM was good for a 10% trade during the day that we published.

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  • Synta Pharmaceuticals, after analyzing early trial results, has positioned its NSCLC drug, Ganetespib, for success in Phase III. And as Phase IIb data mature, says Dr. Kotak, the prospects will come into even better focus.
  • Mr. King laid out the reasons to avoid OPTR last week, but with the announcement that the company has put itself up for sale, the potential to short the stock is off the table. Nevertheless, we don’t believe in the fundamentals, and the sale is likely management acknowledging the same.
  • Questcor (QCOR) proved the bears wrong yet again (all 50% of them) with an estimate-busting fourth quarter and 2012. With fundamentals still strong, we’re looking for a high-$30 to $40 share price in the long-term. QCOR has been good for 25% since mid-January.
  • Dr. Dee Kotak opined on Affymax’s crushing Omontys news. We were out in front of the Omontys’ recall announcement, calling the stock dead money a week before when Fresenius noted the safety issues.
  • Immunomedics (IMMU) is cheap, says Ivan Deryugin, especially considering its broad pipeline and that the company just shored up the balance sheet. Epratuzumab is the lead value driver, a lupus drug, and will have pivotal data out next year. With the opportunity to get in at rock-bottom, now may be the time for a closer look.
  • The Endo Health story is an interesting one: from undervalued under-performer, to possible acquisition target, to strategic makeover story, we’re bullish on the specialty pharma company. Here’s the latest on the company’s recent CEO hire (which, by the way, we speculated on). ENDP, which closed this week at $30, has been a long-term pick for PropThink; we’ve been involved from the mid-$20s.

Make sure to check out the latest addition to PropThink’s offerings: our database of Special Protocol Assessments (SPA). Dr. Aafia Chaudhry put extensive research into the database and the accompanying educational material. And perhaps more important are her case studies, which offer great insight into the confidence-lending spirit of the SPA and its implications for biotech investing.