BST Position Update: June 18, 2013

| June 18, 2013

June 18, 2013

Position Update

. . . . Rockwell Medical (NASDAQ: RMTI) – Buy up to $4.40

RMTI is our most recent biotech recommendation.  They’re developing Soluble Ferric Phosphate (SFP) for iron therapy treatment in patients with chronic kidney disease.

Rockwell believes SFP will provide significant improvement over current IV iron therapy for dialysis patients.  Unlike the current treatment, SFP completely mimics the way a healthy human body processes iron when received through food.

And so far, the treatment has performed well in clinical testing.

The data have shown SFP is effective in maintaining a steady state of iron balance.  And the drug has an excellent safety profile.

SFP is now being studied in two phase 3 clinical trials.  Top-line results are expected in July and October 2013 respectively.

We expect RMTI to trend higher going into the release of the first phase 3 trial results in July. 

At its current price around $4.00 per share, the company has a market value of $105 million.  However, patients in the US are spending $600 million a year on IV iron therapy. And the global market is estimated to be over $1 billion annually.

Grab your shares of RMTI now while they’re still trading at a nice discount.  The stock’s a good buy up to $4.40 per share.

. . . . BioLineRx (NASDAQ: BLRX) – Buy up to $1.85

BLRX is another recent addition to the portfolio.  They’re developing BL-8040 as a treatment for acute myeloid leukemia (AML) and other types of blood cancers.

The drug targets the CXCR4 receptor, one of the most important cancer targets discovered in recent years.  This receptor is directly involved in tumor progression, angiogenesis, metastasis, and cell survival.

BioLineRx believes BL-8040 may help treat AML and various other blood cancers in two different ways.

One way is by directly inhibiting tumor growth and bringing about the death of cancer cells.  The other is by rendering cancer cells more sensitive to chemo- and bio-based anti-cancer therapy.

And so far, BL-8040 has performed well in the clinic.

In pre-clinical testing, the drug inhibited the growth of tumors in multiple myeloma, non-Hodgkins lymphoma, leukemia, non-small cell lung carcinoma, neuroblastoma, and melanoma.  And in a recent phase 1/2 multiple myeloma trial, BL-8040 showed an excellent safety profile, mobilized cancer cells from the bone marrow, and induced cell death.

The next step is a phase 2 trial in up to 50 AML patients.

When we issued the trade alert in late May, the phase 2 trial was still in the planning stages.  Now, we’re happy to report it’s moving forward.  The company announced on June 6th it has enrolled the first patient with more to follow.

Initial results from that trial are expected in the fourth quarter of 2013.

We expect BLRX to trend higher going into these important trial results.

The leukemia therapeutics market was valued at $6.3 billion in 2010 and is expected to hit $11.3 billion by 2020.  However, BLRX has a paltry market cap of just $36 million.  Clearly, the stock has a ton of upside potential should the company report positive results from the trial.

BLRX is a great buy up to $1.85 per share.

. . . . Synergy Pharmaceuticals (NASDAQ: SGYP) – Buy up to $6.00

SGYP is moving higher on some good news.  A Citi Investment Research analyst initiated coverage on the stock with a “Buy” rating this week.  And she set a price target of $8.50.

As a result, the stock’s up more than 10% and climbing.

The analyst says she believes SGYP’s leading drug candidate, plecanatide, will reach the market in 2016 and produce peak sales of $550 million a year.  She also expects Synergy will partner with a larger drug company to help market the drug.

Plecanatide is currently being evaluated in a phase 2b trial for the treatment of constipation-predominant irritable bowel syndrome (IBS-C).  Results are expected by the end of 2013 or in early 2014.

This positive analyst commentary could be just the spark we need to ignite a rally in SGYP.  If you haven’t bought your shares yet, you may want to grab them soon.  SGYP is a buy at $6.00 or less.

. . . . Vical (NASDAQ: VICL) – Buy up to $3.85

VICL has moved lower over the past couple of months.  The stock’s down 29% from its recent high of $4.35 set on April 5th.  And it’s trading about 11% below our initial buy price of $3.48.

However, we view the recent weakness as an excellent buying opportunity.

Remember, VICL is expected to report top-line results from the phase 3 trial of Allovectin in metastatic melanoma in August.  This could be your last opportunity to grab shares of VICL before they start trending higher into the highly anticipated announcement.

We think the results will be positive.

The drug performed well in a phase 2 study, with nearly 12% of patients responding.  And among those responders, the median survival time was an impressive 18.8 months.

What’s more, the drug is targeting a lucrative market.  Decision Resources projects the melanoma drug market will increase more than 7-fold from $210 million in 2010 to $1.5 billion in 2020.

With the shares now trading once again in our buy range, we’re moving VICL from Hold to Buy.  If you don’t own this stock, you may want to grab your shares now for a run up into the phase 3 trial results.

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

MACK has moved significantly higher over the past month and a half.  After hitting a low of $4.06 in early May, the stock has climbed more than 57% to a recent price of $6.39.

The stock plunged in May after one of three patient groups in the phase 1/2 trial of MM-121 in non-small cell lung cancer failed to meet the primary goal.  The goal was to show a 40% improvement in progression-free survival after four months.

While that news was certainly not good, it wasn’t devastating for the drug or the company.

MACK is continuing its evaluation of MM-121 in the two other non-small cell lung cancer patient groups.  And it’s moving forward with two other trials that are studying MM-121 as a potential treatment for ovarian and breast cancer.

In fact, the company announced in late May that the last patient has been enrolled in the phase 2 study of MM-121 in hormone receptor positive breast cancer.  The study is designed to evaluate whether MM-121 in combination with exemestane is more effective than exemestane alone.

Top-line results are expected in the second half of 2013.

What’s more, investors have returned their attention to MM-398, MACK’s most advanced drug candidate.  MM-398 is novel encapsulated formulation of anti-cancer drug irinotecan. The drug is currently being studied in a phase 3 trial as a potential treatment of metastatic, gemcitabine-resistant pancreatic cancer.

Top-line results from that trial are also expected in the second half of this year.

Given the stock’s amazing comeback, it’s clear that investors have quit worrying about the initial setback with MM-121.  They’re now focusing on the upcoming results of the four phase 2 studies and one phase 3 study.

With so many potential catalysts, it’s no wonder investors are piling back into MACK.  If you haven’t grabbed these shares yet, you may want to do so now.  This stock could be gearing up for a major move higher.

Action To Take

  • Move Vical (NASDAQ: VICL) from Hold to Buy.


Category: BST Update

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