BST Position Update: February 26, 2014

February 26, 2014

. . . . Acasti Pharma (NASDAQ: ACST) – Buy up to $1.40

Acasti is our most recent addition to the portfolio.  This exciting biotech is developing CaPre for the prevention and treatment of hypertriglyceridemia.

CaPre is a highly purified omega-3 phospholipid concentrate derived from krill oil.

We’re excited about CaPre because it offers significant advantages over similar approved drugs and others like it in development.

According to Acasti, CaPre is the only omega-3 drug with potential to show clear clinical superiority in treating triglycerides, LDL (bad cholesterol), and HDL (good cholesterol). Results from a recent phase 2 trial demonstrated that CaPre not only performed better than the standard of care in reducing triglyceride levels but also had a positive effect on both LDL and HDL levels.

What’s more, the trial data showed CaPre was safe and well tolerated.

Patients who took CaPre reported no serious adverse events during the trial.  And they showed a lower incidence of adverse events compared to the group following the standard of care.

The next catalyst on tap for ACST will be results from a second phase 2 trial of CaPre in patients with mild to severe hypertriglyceridemia.  Those results are expected in the second half of 2014.

We’re expecting ACST to trend higher going into these results.

Investors are likely to be optimistic about the upcoming data after the success of the first phase 2 trial.  And CaPre’s blockbuster sales potential is sure to draw higher than usual investor interest to the stock.

If you haven’t grabbed your shares yet, you probably shouldn’t wait too much longer.

ACST has been moving higher since we recommended it last week.  It has gained about 10% from our entry point.  And it’s closing in on our maximum buy price.

ACST is a good buy at $1.40 or less.

. . . . Threshold Pharmaceuticals (NASDAQ: THLD) – Hold

THLD has been moving higher since early February.  The stock is now up 13% from our initial buy price.  And it’s showing no signs of changing direction any time soon.

It looks like investors saw good value in THLD after it pulled back in late January.  And they’re taking advantage of the situation to get into the stock ahead of the phase 3 trial data expected around mid-year 2014.

With THLD now trading above our maximum buy price, we’re going to move it from Buy to Hold.  Hang on to your shares for greater potential gains.

. . . . Venaxis (NASDAQ: APPY) – Hold

APPY has been trading sideways since a slight pullback in late January.  As important trial results are now just around the corner, it appears investors are taking a wait and see approach toward the stock.

According to CEO Steve Lundy, top-line data from the pivotal trial of APPY1 are expected in early March.

Despite the recent lull in trading, our view on APPY has not changed.  In fact, we reiterate the outlook and recommendation made in our January 21st position update…

“Based on the success of prior trials, the receipt of a CE mark for APPY1 in Europe, and positive feedback from many doctors and hospitals, we think the odds favor positive results. As such, we recommend you hang on to APPY for potentially greater gains.”

Continue holding APPY for higher prices.

. . . . Prana Biotechnology (NASDAQ: PRAN) – Hold

We got great news from Prana last week.  The phase 2 trial of PBT2 in Huntington disease was a stunning success!

First off, PBT2 met the trial’s primary goals of safety and tolerability. 

The data show that 95% of participants completed the study on their assigned dose.  And there were no substantial differences in adverse events across the two PBT2 groups and the placebo group.

In addition, the drug met one of the trial’s important secondary endpoints.

The data showed a statistically significant improvement in a measure of executive function (cognition).  This result mirrored a similar observation previously reported in the Alzheimer’s trial.  And the two findings are very important as they suggest a common mechanism for neurodegeneration in these diseases based on metal interactions.

According to Dr. Rudy Tanzi, Professor of Neurology at Harvard Medical School and Prana’s Chief Scientific Advisor…

“In my opinion, these findings significantly elevate the potential for PBT2 as an effective therapy for both Huntington disease and Alzheimer’s disease.”

What’s more, the improvement in executive function was accompanied by a signal of slowing in functional decline.  This marked the first time a dose-related slowing in functional decline over a six-month period of treatment had ever been observed.

And last but not least, a reduction in brain tissue atrophy was observed in regions of the brain known to be affected by Huntington’s disease.  This is an exciting development as Huntington disease is known to cause a gradual loss of brain tissue.

Based on these positive results, Prana now plans to advance PBT2 into a confirmatory phase 3 trial.  If results from that trial are positive, PBT2 could be approved by the FDA for the treatment of Huntington’s disease.

Investors are clearly excited by these results!

They sent PRAN up 45% in a single day when the news first broke.  And after a couple of days of profit taking, they’re once again driving the stock higher.

Best of all… we’re now sitting on a gain of over 130% with potential for more upside very soon.

Remember, results from the phase 2 trial of PBT2 in Alzheimer’s disease are expected next month.  If those results are positive, PRAN could take off like a rocket!

With a major catalyst fast approaching, we recommend you continue holding your shares of PRAN.  The potential for another major rally is just too good to pass up.

. . . . Synergy Pharmaceuticals (NASDAQ: SGYP) – Hold

As we predicted a few weeks ago, SGYP is moving higher ahead of upcoming trial results. The stock has increased by more than 20% since late January.  And we’re now sitting on a solid 10% gain.

Remember, results from the phase 2b trial of plecanatide in IBS-C are expected early in the second quarter of 2014.

We’re expecting the stock to continue moving higher going into these results.  As such, we suggest you hang on to your shares for greater gains.

. . . . Array BioPharma (NASDAQ: ARRY) – Hold

Things could finally be turning around for ARRY.  The stock has been moving higher since late January after declining for six straight months.

With that said, it’s too early to tell if the stock is starting a new uptrend just yet.  We’ll need to see it break the string of lower highs and lower lows before we can call an end to the recent downtrend.

The company recently provided an update on its clinical development strategy.  And it appears management has a lot of activity planned for several drugs in the pipeline.

Click here to read the full press release.

The part we’re focusing on is the company’s new phase 2 trial for ARRY-797 in patients with LMNA-related dilated cardiomyopathy (DCM). 

LMNA-related DCM is a serious, genetic cardiovascular disease.  By age 45, patients with this disease have an event free survival of only 31% despite conventional heart failure treatments (events defined as cardiovascular death, transplant, or major cardiac event).

Management says that in vivo studies of ARRY-797 in models of LMNA-related DCM have shown significant improvements in heart function, reversal of cardiac remodeling, general well-being and survival.  Plus, a single patient taking the drug for one year has had echocardiographic improvements, and the drug has been well tolerated.

Based on all of this data, Array has begun a 12-patient phase 2 study to explore the efficacy and safety of ARRY-797 in patients with LMNA-related DCM.  The primary endpoint is the change from baseline in a 6-minute walk test at 12 weeks.  Other endpoints include left and right ventricular function, safety, and pharmacokinetics.

Preliminary results from this study are expected by the end of 2014.

We’re expecting ARRY will eventually trend higher as investors begin to anticipate the release of these study results.  In the meantime, there are also plenty of other trials and studies which could generate positive news flow that drives the stock higher.

Continue holding ARRY for bigger gains.

Action To Take

• Move Threshold Pharmaceuticals (NASDAQ: THLD) from Buy to Hold.

 

Category: BST Update