BST Position Update: January 31, 2014

| January 31, 2014

January 31, 2014

Position Update

. . . . BioLineRx (NASDAQ: BLRX) – Buy up to $3.30

BLRX is our most recent addition to the portfolio.  But this isn’t the first time we’ve traded the stock.  Many of you will recall we closed out a position in BLRX back in November for a solid 55% gain.

Not a bad six-month return.

And we’re expecting even better results this time around.

After selling BLRX in November, the company announced initial results from the phase 2 trial of BL-8040 in acute myeloid leukemia (AML).  And they were quite promising.

The early data showed that the drug is not only safe but exhibiting strong signs of efficacy.  This bodes well for the drug and could spark a rally in the stock leading up to the next round of data.

More initial results from this trial are expected during the second quarter of 2014.  And final results should be made available in the second half of the year.

In the meantime, BioLineRx just received more good news from the FDA regarding its leading drug candidate last week.

The regulatory agency awarded Orphan Drug Status to BL-8040 for use in mobilizing stem cells during stem cell transplant procedures.  High-dose chemotherapy followed by stem cell transplantation has become an established treatment for a variety of hematological malignancies.

This is the second time BL-8040 has been awarded orphan drug status in the past four months.  The first time was in September 2013 as a treatment for AML.

Orphan drug status is awarded for drugs intended to treat rare diseases that affect not more than 200,000 people in the US.  The designation affords seven years of marketing exclusivity, clinical protocol assistance with the FDA, as well as federal grants and tax credits.

While BLRX initially jumped on this news, it has since moved back to just above our entry point.  With that said, the stock continues to fluctuate within a tight uptrend.

You may want to grab your shares of BLRX if you haven’t already.  With more trial results just around the corner, the stock could move up and out of our buy range at any time.

. . . . Venaxis (NASDAQ: APPY) – Hold

APPY continues to move higher in a solid uptrend.

The stock recently hit a high of $2.85 to give us an unrealized peak gain of 48% on the position.  And while the shares have come off that high a bit over the past several days, they’re up a respectable 30% from our entry point.

The stock is no doubt moving higher on expectations that pivotal trial results for APPY1 are coming soon.

Just last Friday the company announced it had completed patient enrollment in the trial. What’s more, management said it expects to submit the drug for FDA approval “at or near the end of the first quarter, assuming positive data.”

Of course, that statement implies trial results will be made available before the end of the quarter.

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.

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

PRAN is on fire!

Shares of this tiny biotech hit a new all-time high yesterday of $13.29 to give us a phenomenal 230% unrealized gain on the position.  That’s an outstanding return, especially considering we’re just three months into the trade.

Investors are piling into the stock ahead of upcoming trial results…

Remember, Prana is expected to release results from two phase 2 trials of PBT2 in Alzheimer’s and Huntington’s diseases during the current quarter.  If the results are positive, the company may have a mega-blockbuster drug in its hands.

Decision Resources projects the Alzheimer’s drug market will grow to a mind-boggling $14 billion a year by 2020.  And Global Industry Analysts estimates the Huntington’s drug market will exceed $870 million a year by 2018.

There’s no question the stock has made huge gains in relatively short order.  And we’re certainly tempted to recommend locking in these substantial profits right now.

With that said, we’re acutely aware that the stock has a ton of upside momentum currently.  As such, we’re going to maintain our hold rating on Prana while we continue to monitor it closely.

Hang on to PRAN for bigger profits.

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

We received some interesting news from Synergy this week.  The company announced it will be spinning off its wholly-owned subsidiary, ContraVir Pharmaceuticals.

As a result, Synergy shareholders will receive shares of ContraVir and cash in lieu of any fractional shares.  Please visit the company’s website for details of the transaction.

According to a recent press release, the ex-dividend date is pending and will be set by NASDAQ.

ContraVir is a development stage biotech focused on developing FV-100 for herpes zoster (shingles), which is an infection caused by reactivation of the varicella zoster virus (VZV). According to the company, “[p]ublished pre-clinical studies demonstrate that FV-100 is significantly more potent against VZV than… the FDA approved drugs used for the treatment of shingles.”

It’s not clear at this time what ContraVir’s plans are regarding further clinical testing of FV-100.  Synergy has not engaged in any clinical study of FV-100 since it acquired the drug from Bristol Myers Squibb in August 2012.

We expect to develop a more informed opinion on ContraVir as the company provides more details about its plans for FV-100.  In the meantime, be on the lookout for the addition of ContraVir shares to your investment account.

With respect to Synergy, we’re still anticipating the stock will rally going into the phase 2b trial results of plecanatide in IBS-C.   Those results are expected early in the second quarter of 2014.

Continue holding SGYP for higher prices.

. . . . Halozyme Therapeutics (NASDAQ: HALO) – Hold

HALO continues to trend higher in a steep uptrend.

The stock recently hit a new high of $18.18 to give us a sensational unrealized gain of 233%.   While the shares have drifted off that high in recent days, the stock remains up 187% from our entry point as I write.

The recent surge in share price follows positive news on Roche’s subcutaneous (SC) formulation of MabThera.  Last week, the European Union Committee for Medicinal Products for Human Use recommended the EU approve MabThera SC for the treatment of common forms of non-Hodgkins lymphoma (NHL).

MabThera SC uses Halozyme’s recombinant human hyaluronidase (rHuPH20) to make subcutaneous administration possible.  This new route of administration shortens the treatment time from two-and-a-half hours intravenously to approximately five minutes.

According to the press release, Roche expects a final decision from the European Commission in the coming months.

Worldwide sales of Rituxan/MabThera exceeded $7.5 billion last year. Clearly, if MabThera SC is approved in Europe, Halozyme stands to derive significant royalty revenue from sales of the drug going forward.

Don’t forget, the potential EU approval of MabThera SC is just one of several potential upside catalysts HALO has on tap this year.  Please see our last update for a detailed rundown of the company’s upcoming catalysts.

HALO has certainly generated huge gains since we recommended it 10 months ago.  But we believe it still has more room to run.  Continue holding HALO for bigger profits.

Action To Take

  • None at this time.


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