BST Trade Alert: January 22, 2014
January 22, 2014
Recommendation:
Buy BioLineRx (NASDAQ: BLRX) up to $3.30 per share.
About the Company:
Today’s recommendation is one that many of you will recognize and remember fondly from last year. And for those of you who missed our initial trade in BLRX, you’re in for a real treat.
Click here to read our prior trade alert on BLRX in its entirety.
We first introduced BLRX back in May of 2013 when it was trading for just $1.68 per share. The stock had dropped significantly on disappointing phase 2/3 trial results for its schizophrenia drug candidate. But where others saw failure, we saw a golden opportunity to snap up shares of a rising biotech on the cheap.
And the stock didn’t disappoint.
After moving sideways in June, BLRX took off in July and never looked back. It trended higher over the next several months, hitting a high of $3.09 by early October. With the company poised to announce results from the phase 2 trial of BL-8040 in acute myeloid leukemia, we decided it would be prudent to have subscribers lock in their profits.
As such, we recommended selling BLRX in late November for a solid 55% gain.
At the time, we were concerned that the stock might drop on the trial results regardless of whether they were positive or negative. We believed there was a good chance the stock would fall victim to a “sell on the news” effect if the results were good. And of course, we all know what would have happened if the results were disappointing.
With that said, the initial results from this trial were reported in December, and they were quite promising. However, the stock not only didn’t drop on the news, it has been inching its way higher ever since.
The good news is…
BLRX is trading only slightly higher than where it was when we sold it in November. And, with multiple catalysts on tap this year, the stock has huge upside potential from here.
Let’s take a closer look now at the company’s leading drug candidate.
About the Drug:
This is usually the point where we provide a detailed description of the leading drug candidate and how it’s designed to work. But in this case, we already covered that sufficiently in our prior trade alert.
So, rather than rehash that information here, we direct you to our original trade alert to get the skinny on BL-8040.
Let’s now get back to the initial results of the phase 2 trial that were released in December.
First off, the results showed that BL-8040, as a stand-alone therapy and in combination with high-dose Cytarabine, was safe at all doses tested. No serious adverse events were reported, and the primary adverse event was just a minor and transient reaction at the injection site.
This is great news as safety and tolerability are the primary endpoints for this particular study.
But what’s even more exciting is that BL-8040 is already showing strong signs of efficacy.
BioLineRx CEO, Dr. Kinneret Savitsky, provided this glowing report of the early efficacy results…
“Although the trial is at an early stage and we have not yet completed the dose-escalation assessment, we already see impressive mobilization of cancer cells from the bone marrow into the blood stream at a rate that is markedly higher than that seen with other drugs tested for this indication. In addition, there are initial signs of robust apoptosis of cancer cells, similarly to what we have seen in pre-clinical studies.”
And here’s how Dr. Gautam Borthakur, the principal investigator from the world-renowned MD Anderson Cancer Center in Houston, described the results…
“The initial results of the BL-8040 Phase 2 trial show a remarkable apoptotic effect of the drug on AML cancer cells, and the drug is exceptional in its ability to induce both mobilization of cancer cells from the bone marrow, as well as a concomitant cell death effect. I therefore have high hopes that this drug will become an important addition to the limited drug arsenal for AML treatment.”
No question about it, the initial results from this important mid-stage trial bode well for BL-8040. As such, we think the stock has big upside potential going forward.
The company plans on releasing further interim results from this trial in the second quarter of 2014. And final results are expected in the second half of 2014.
About the Market for This Drug:
AML is a relatively rare disease, accounting for about 1.2% of cancer deaths in the US. However, it’s expected to become more prevalent as the population ages.
What exactly is AML?
AML is a cancer of the myeloid line of blood cells. It’s characterized by the rapid growth of abnormal white blood cells that accumulate in the bone marrow and interfere with the production of normal cells.
First-line treatment for AML is chemotherapy, which is divided into induction and post-remission therapy.
Induction therapy attempts to achieve complete remission by reducing the number of leukemic cells to an undetectable level. Post-remission therapy, on the other hand, tries to eliminate any residual undetectable disease and achieve a cure.
Unfortunately, induction therapy is not always successful. And as a result, AML does return in some patients.
For patients with relapsed AML, the only proven potentially curative therapy is hematopoietic stem cell transplant. Mylotarg, the only FDA-approved drug specifically designed for AML, was voluntarily withdrawn from the market by Pfizer in 2010.
As such, the leukemia therapeutics market represents a huge opportunity.
This market was valued at a whopping $6.3 billion in 2010. But with the aging of the Baby Boomers, it’s expected to grow to a stunning $11.3 billion by 2020.
About the Potential Catalyst:
Further initial results from the phase 2 trial of BL-8040 in AML are expected during the second quarter of 2014.
Final results from that same trial are expected in the second half of 2014.
About the Shares:
BLRX has been moving higher since we exited the stock in late November. However, it hasn’t moved up so much that it would be imprudent to re-enter the stock here. In fact, the shares are up only 11.5% since we took our profits off the table.
More importantly, we believe BLRX has tremendous upside potential from here.
The median analyst price target for the stock is $6.00 per share. And at least one analyst thinks the stock will hit $7.00 per share in the next 12 months.
Based on these projections, BLRX has upside potential of 107% to 141%!
But don’t waste any time establishing your position. BLRX has been bumping up against the $3.00 per share level for several weeks now. If the stock breaks through that resistance level, it could be off to the races.
Grab your shares of this exciting biotech as soon as possible.
Key Facts:
| Company: | BioLineRx |
| Ticker: | BLRX |
| Recent Price: | $2.90 |
| Market Cap: | $68 million |
| Avg. Daily Volume: | 124,078 shares |
Chart:
Category: BST Trade Alert
