BST Position Update: May 16, 2013

May 16, 2013

. . . . AcelRx Pharmaceuticals (NASDAQ: ACRX) – Sell

ACRX is on fire!

The biotech’s shares soared to a new high of $7.30 just yesterday.  Investors have clearly piled into the stock ahead of the upcoming phase 3 trial data for ARX-01.

Those results are expected before the end of the current quarter.

With the stock having run up so far so fast, the risk of a drop has increased significantly. Let’s go ahead and lock in our terrific short-term gains.

Sell ACRX as soon as possible to capture a 40% profit!

. . . . MannKind (NASDAQ: MNKD) – Sell

MNKD has been nothing short of phenomenal this year.  Since we recommended it in January, this amazing biotech has more than doubled in value!

But with important trial results fast approaching, you can be sure the focus will turn to the risks involved with the company’s novel inhalable diabetes treatment.  As such, we think it’s time to lock in our stellar gains.

Sell MNKD right away to bank a superb 97% profit on the trade! 

. . . . Trius Therapeutics (NASDAQ: TSRX) – Sell

TSRX is another one of our biotech’s that has shot higher in recent days.  In fact, the stock hit a new high of $8.50 yesterday.

Not too shabby.

Investors pushed the shares up after the company announced it received a new patent for tedizolid phosphate.  We think this a great opportunity to lock in a nice profit on this trade.

Go ahead and sell TSRX to pocket a gain of 45%!

. . . . Vanda Pharmaceuticals (NASDAQ: VNDA) – Sell

Vanda has performed very well of late.  The stock’s up 49% year-to-date.  And it has produced a stunning 87% gain off the November 2012 low of $2.92 per share.

With the shares having nearly doubled in just six months, we think it’s time to exit this trade.  Go ahead and sell VNDA as soon as possible. Let’s cut our losses and conserve capital for better opportunities.

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

Synergy is our latest recommendation.  This exciting biotech is developing Plecanatide for chronic idiopathic constipation (CIC) and irritable bowel syndrome with constipation (IBS-C).

Both of these disorders are widespread in the US.

Approximately 45 million Americans suffer from CIC and 13 million from IBS-C.  As such, the US market for drugs treating these conditions is projected to be worth several billion dollars a year.

Now, a new drug for CIC and IBS-C has recently hit the market.  Ironwood Pharmaceuticals (NASDAQ: IRWD) received FDA approval for Linzess (linaclotide) in August 2012.  And analysts are projecting peak sales for Linzess of $1.5 billion annually in the US and Europe.

But that doesn’t mean Plecanatide can’t be a blockbuster drug.

In fact, recent results from a phase 2b/3 trial in 951 CIC patients showed that Plecanatide was just as effective as Linzess was at that stage of development.  What’s more, there was a lower incidence of diarrhea among patients taking Plecanatide compared to the Linzess trial.

The results are so encouraging that an analyst with Aegis Capital said annual sales of Plecanatide in the US and Europe will “easily be able to get over $2 billion.”

So, what’s next?

Plecanatide is currently undergoing a phase 2b trial in 350 IBS-C patients.  Results from that trial are expected by the end of 2013.

We expect SGYP will trend higher going into the end of the year as investors anticipate positive results.  They will likely drive up the share price to better reflect Plecanatide’s blockbuster sales potential.  With a market cap of just $370 million, SGYP could double or triple from its current price.

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

Halozyme is surging!

As I write, HALO is up more than 14% intraday and has hit a new high of $8.01.  That print gave us a terrific 47% gain on the position.

The stock’s jumping on new data from a phase 1b study of PEGPH20 in 28 patients with stage IV metastatic pancreatic cancer.  Patients were treated with PEGPH20 in combination with gemcitabine.

Here are the important points straight from the company’s press release…

“The overall response rate… was 42 percent… Treatment was generally well tolerated and the adverse event profile was consistent with those seen in previous studies of PEGPH20 as a single agent and as previously reported for gemcitabine alone.  There was no evidence of new observed toxicity.”

The data provide huge support for the hypothesis that PEGPH20 provides a significant treatment benefit when given in combination with gemcitabine.  And more importantly, it’s further validation of HALO’s revolutionary ENHANZE Technology.

As such, HALO’s moving PEGPH20 into a multicenter, randomized clinical trial involving 124 patients.

The phase 2 study will evaluate PEGPH20 as a first-line therapy for patients with stage IV metastatic pancreatic cancer.  Patients will receive gemcitabine and nab-paclitaxel either with or without PEGPH20.

With HALO now trading above our maximum buy price, we’re moving the stock from Buy to Hold.  Hang on to your shares for more upside.

Action To Take

• Sell AcelRx Pharmaceuticals (NASDAQ: ACRX) for a 40% gain.
• Sell MannKind (NASDAQ: MNKD) for a whopping 97% profit.
• Sell Trius Therapeutics (NASDAQ: TSRX) for a 45% gain.
• Sell Vanda Pharmaceuticals (NASDAQ: VNDA) to conserve capital.
• Move Halozyme Therapeutics (NASDAQ: HALO) from Buy to Hold.

 

Category: BST Update