It was a shortened trading week in the U.S. with markets closed the entirety of Friday and half of Thursday, though activity and volatility in the healthcare sector remained a constant.
Agenus (AGEN) on Tuesday reported updated results from an open-label, single-arm study of Prophage, the company’s proprietary cancer vaccine, in glioblastoma multiforme. The stock jumped 25% in early trading on what appears to be encouraging survival data. What many investors missed, however, was that these results are oldnews. Agenus reported similar, though immature, survival and PFS data from the study last September, and presented preliminary results from the study at a medical conference in May of 2013 – again, very similar data. Considering that results for Prophage in this indication were largely factored into the stock in mid-2013 (both previous rallies failed to hold up), PropThink suggested on Tuesday morning that AGEN was likely to fade the big rally. Sure enough, shorting the open was good for 11% during the session.
At PropThink, we focus on finding quality fundamental investments, though technicalanalysis often informs the structure of a trade. Two weeks back, we wrote to PropThink Premium members that Albany Molecular (AMRI) – which is already a longterm favorite at PropThink – was worth watching on its next pullback. At the time, AMRI was challenging all-time highs at $20 and had the makings of a Cup and Handle formation, a recognizable continuation pattern.
The pattern played out beautifully this week with AMRI breaking out of resistance on significant volume before continuing its upward move. The stock is already up 12% for those who added on the dip.
More importantly, AMRI is up almost 40% since we outlined the long thesis in April. Read the report – free – by clicking here.
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On the same note, we’ve got to take credit a for longterm interest that took a beating this week: Tekmira Pharmaceuticals (TKMR) dropped 15% when the company announced that the FDA is putting a trial of TKM-Ebola on clinical hold for the drug’s unexpected impact on the immune system. The FDA requested additional data related to cytokine elevations, which were observed at higher doses of TKM-Ebola in the current portion of the study, before allowing Tekmira to advance to the multiple ascending dose segment of the study. Tekmira is also changing study protocol.
This isn’t a complete surprise having seen data from the study in May; there’s reason to believe that Tekmira can overcome this issue. Nevertheless, the immediate read-through for the market was that the safety issue may impact other programs at TKMR, or the platform as a whole. Read the Friday column here.
In addition, we sent our latest research out to Premium members late this week, revisiting a 2013 IPO that hasn’t received much attention despite a plethora of market-moving events in the second half of 2014. Although there are reasons to be cautious about the longterm, commercial outlook for this small company, we like the trade in the third quarter.
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Happy Independence Day folks. Here’s to the long weekend!
One or more of PropThink’s contributors are long AMRI or TKMR.
