BST Position Update: January 18, 2013

| January 18, 2013

January 18, 2013

Position Update

. . . . Array BioPharma (NASDAQ: ARRY) – Buy up to $4.80

We’re very excited about our latest addition to the portfolio, Array BioPharma.  This small biotech is developing a number of drugs to treat cancer and inflammatory diseases.

Why are we so excited?

ARRY has a robust pipeline of 14 drugs in mid- to late-stage clinical testing.  They have co-development partnerships with several major drug companies.  And the company has a solid financial position with $138 million in cash on the books.

In other words, ARRY is a small biotech stock with huge upside potential.

The drug we’re focusing on for our trade is ARRY-502.  It’s an oral CRTh2 antagonist with potential to treat asthma, severe cases in particular.  And the drug may have advantages over competing asthma drugs.

ARRY-502 is currently being tested in a six-week phase 2 trial involving 180 asthmatic patients.  Top-line results are expected in the second quarter of 2013.  After the results are released, Array plans to find a development partner for the drug.

If the phase 2 trial results are positive, ARRY should soar!

You see, the drug has tremendous market potential.  A mind-boggling 26 million Americans suffer from asthma currently.  And more than $15 billion is spent on asthma treatment every year.

Last year, the top asthma drug – Singulair – generated over $3.2 billion in revenue for Merck and Kyorin.

If you haven’t picked up shares of ARRY, you still have time.  The stock’s a good buy up to $4.80 per share.

. . . . Merrimack Pharmaceuticals (NASDAQ: MACK) – Buy up to $7.25

MACK has been treading water since we recommended it in early December.  But we think it’s just a matter of time before the stock takes off.  Remember, the biotech has an upcoming catalyst that could spark a rally in the shares.

Top-line data from two separate phase 2 trials of MM-121 are expected in the first half of 2013.

MM-121 is the company’s novel monoclonal antibody for breast cancer and non-small cell lung cancer.  It performed well in earlier trials.  And it has blockbuster sales potential for each cancer indication.

With important trial data on the horizon, MACK could easily trend higher ahead of the results.  Grab your shares now if you don’t own them already.  The stock’s a steal up to $7.25 per share.

. . . . Anacor Pharmaceuticals (NASDAQ: ANAC) – Buy up to $5.20

ANAC jumped more than 4% today on heavier than average volume.  That’s a big one-day gain for the biotech.  And the large volume shows buying was broad based.

Could it be the beginning of a larger rally?

It just might be.

Investors are clearly piling back into ANAC ahead of important upcoming trial results. Remember, data from the first of two phase 3 trials of Tavabarole are due by the end of January.

Tavabarole is Anacor’s topical, once-daily treatment for onychomycosis, a fungal infection of the nail and nail bed.  Anacor believes Tavabarole could be a major improvement over leading treatments on the market today.

In phase 2 testing, Tavabarole was nearly as effective as the leading FDA approved treatment (Lamisil) without the risk of liver failure.  And it was twice as effective as another frequently prescribed medication (Penlac).

These terrific phase 2 results certainly bode well for the coming phase 3 data.

What’s more, if Tavabarole is ultimately approved, it should become a huge source of revenue for Anacor.  Before generics entered the market, Lamisil had peak U.S. sales of $1.2 billion and Penlac’s hit $350 million.

If you haven’t grabbed your shares of ANAC yet, you’d better act fast.  The phase 3 trial results are coming any day now.  And the stock is likely to soar if the results are positive.

Go ahead and buy ANAC up to $5.20 per share.

. . . . OPKO Health (NYSE: OPK) – Hold

OPK’s on fire!

The stock’s galloping higher in a steep uptrend with no end in sight.  It’s up more than 38% in a month-and-a-half.  And it just set a new 52-week high today of $6.19… its fourth new high in five trading sessions.

Best of all, we’re sitting on a terrific gain of 40%.

The shares broke into new high territory on January 14th.  That’s the day OPKO announced it expanded its collaboration with Bristol Myers Squibb (NYSE: BMY) on OPKO’s diagnostic test technology.

The new agreement extends the original multi-year collaboration established in 2010. What’s more, the two companies specifically said they will continue to work together on developing OPKO’s diagnostic test for Alzheimer’s disease.

This is great news!

Bristol Myers clearly believes the Alzheimer’s test still has good potential for success.  If it didn’t, the drug giant would certainly have washed its hands of the entire project.

With OPK surging higher nearly every day, we recommend hanging on to your shares.  Let this winner run for all its worth.

Action To Take

  • None at this time.


Category: BST Update

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