BST Position Update – January 16, 2015

| January 16, 2015

BST Position Update

. . . . Arena Pharmaceuticals (NASDAQ: ARNA) – Hold

As I pointed out in the trade alert for Arena Pharmaceuticals, the company has a proven track record of bringing new drugs to market. And they have cash flow from the sales of BELVIQ that will help support the costs of new drug developments.

One of those drugs, drug ADP334, had positive results from an early clinical trial as a treatment for autoimmune diseases. They are now expediting the Phase 2 clinical trials for ADP334.

Needless to say, that’s great news for ARNA. The stock is currently up 32% to $5.30 and above our $5.00 buy up to price. Continue holding for more upside.

. . . . Argos Therapeutics (NASDAQ: ARGS) – Buy

ARGS stock price has been volatile over the last few weeks. A few weeks ago the company announced that the phase 2b clinical trial for AGS-004 in patients chronically infected with HIV-1 failed to meet the primary endpoint of the trial.

However, the company did say there were some positive results from the trial that will lead to more testing. They believe that AGS-004 combined with other treatments has the potential to lead to the elimination of HIV-infected cells.

In other words, the trial didn’t produce the expected results but further testing could reveal this drug to be a major stepping stone toward finding a cure for AIDs.

As result, we are maintaining our buy recommendation on ARGS.

. . . . Conatus Pharmaceuticals (NASDAQ: CNAT) – Hold

CNAT reported the results from clinical trials for the drug emricasan for the treatment of liver cirrhosis.

The Phase 2 trial in patients with acute-on-chronic liver failure (ACLF), Phase 1 trial in patients with mild, moderate, and severe hepatic impairment, and Phase 1 trial in patients with severe renal impairment provide initial top-line results that will inform on appropriate dosing of renal and hepatic impaired patients in future clinical trials.

In short, the drug didn’t prevent people that were near death from liver failure from dying. But it did provide evidence that emricasan should continue to be developed and studied.

These results support our decision to hold onto our shares of CNAT as they continue to develop this drug.

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

PRAN plunged after the phase 2 IMAGINE trial was deemed a failure by investors.  The trial did not achieve the primary endpoint of showing a statistically significant decrease of amyloid burden in participants treated with PBT2 relative to placebo. We had hopes that PBT2 may have found new life as a potential treatment for Alzheimer’s disease.  But that has never come to fruition.

At this point, we don’t see much hope of PRAN recovering any time soon. We recommend selling your shares of PRAN in order to focus on stocks with more potential.

. . . . Halozyme Therapeutics (NASDAQ: HALO) – Sell Half

HALO was forced to halt its phase 2 study of PEGPH20 at the recommendation of an independent data monitoring committee last year.  The FDA later placed a clinical hold on the trial which temporarily halts patient enrollment.

According to a recent statement from HALO’s CEO, it looks like they are nearly ready to start enrollment in the study again.

The initial reaction from investors has pushed the stock to its highest levels since they announced the halt of the previous study. At a recent price of $14.51, we are currently up 166% on this trade. Clearly, our patience with HALO is being rewarded. But we don’t want to see our profits disappear if the study were to be halted again for some reason.

We recommend selling half of your position for a gain of 166% to recoup your initial investment and capture a small profit. Continue holding the other half of your shares as HALO continues to develop PEGPH20.

Action To Take

  • Sell Prana Biotechnology (NASDAQ: PRAN).
  • Sell half of Halozyme Therapeutics (NASDAQ: HALO).
  • Move Arena Pharmaceuticals (NASDAQ: ARNA) to a Hold.


Category: BST Update

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