BST Trade Alert – September 25, 2015
Recommendation:
Buy OncoMed Pharmacueticals (NASDAQ: $OMED) up to $16.00 per share.
About the Company:
OncoMed is a clinical-stage company that researches and develops anti-cancer stem cell and immuno-oncology therapeutics. OMED has seven anti-product candidates in clinical development.
OncoMed was founded with a focus on cancer stem cells which are a subpopulation of cells in a tumor responsible for driving growth and metastasis of the tumor. Their products are designed to target cancer stem cells by blocking their ability to self-renew.
The company has partnerships with other biotech giants such as Bayer Pharma AG and GlaxoSmithKline. They have raised over $600 million from their partners to support their research and development.
With seven products currently in clinical trial, there is a high probability this company will see profits very soon.
Last month after they announced a second quarter loss, several key events happened that should drive up the stock price.
About the Drug:
Tarextumab is a fully human monoclonal anti-body that targets the Notch2 and Notch3 receptors. This drug is expected to be used as a first-line treatment for advanced stage pancreatic cancer patients.
Also, when used in combination with Etoposide and Platinuk Therapy, the drug is being tested on patients with advanced small cell lung cancer patients.
About the Market for This Drug:
Lung cancer causes more deaths then colorectal, breast, and prostate cancer combined. An estimated 158,040 Americans are expected to die from lung cancer in 2015, accounting for 27% of all cancer patients.
That’s a lot of cancer patients in need of cure for the disease.
In addition to treating lung cancer, Tarextumab is being developed to treat pancreatic cancer. According to the Mayo Clinic, pancreatic cancer often has a very poor prognosis, even when diagnosed early. It spreads rapidly and is rarely detected in its early stages. In fact, the life expectancy for end stage pancreatic cancer is less than one year when not diagnosed early.
A treatment that is successful for advance stage pancreatic cancer is in great demand and if OncoMed is the one that finds it, it will benefit financially.
About the Potential Catalyst:
Phase II clinical trials for Tarextumab has 177 patients enrolled. The ALPINE study enrolled patients that had not received any prior treatment. Enrollment in the double-blind, multi-cener clinical study began in July 2014.
The phase II trial is designed to evaluate the efficiency of tarextumab in combination with Abraxane. The trial will compare the overall survival of patients receiving Tarextumab versus a placebo.
The company announced that they have completed enrollment of Phase 2 Apline Clinical Trials of Tarextumab 8 months ahead of schedule. The Chief Medical Officer of OncoMed, Jakob Dupont, M.D, has said the primary endpoint of this study is overall survival.
Needless to say, if this drug is approved it would be a cash cow for OMED.
About the Shares:
OMED is currently trading for $15.25. We have seen the stock decline since reaching a high of $29.83 in March. The previous low back on November of 2013 was around $13.00. This level should be a solid floor of support for the stock.
This looks like a time to buy considering all of the positive developments. And the support level just below the current price. Look to pick up your shares between $13.00 and $16.00. The upside for this stock clearly outweighs the downside at this price.
Key Facts:
Company: OncoMed Pharmaceuticals
Ticker: OMED
Recent Price: $15.25
Market Cap: $490.88 million
Average Daily Volume: 135.64K
Chart:
Category: BST Trade Alert
