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3 Humongous Health-Care Stocks This Week

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There's power in positive thinking. The late author Norman Vincent Peale made plenty of money off that philosophy. Some investors made lots of money over the last five days thanks to positive thinking about these three health-care stocks that saw humongous gains.

Optimism from Morgan Stanley
Analysts at Morgan Stanley must have read Peale's book. On Tuesday, the investment firm upgraded Infinity Pharmaceuticals (NASDAQ: INFI  ) to "overweight" and set a new price target of $47 per share. Infinity shares responded by jumping nearly 18% for the week.

What sparked Morgan Stanley's glowing endorsement? The main reason seems to be Infinity's experimental PI3K inhibitor IPI-145. Infinity reported positive results from its phase 1 trial of IPI-145 targeting treatment of blood cancers back in December. The company plans to advance the drug into phase 2 studies for this indication in 2013. Infinity also has mid-stage trials either planned or in progress for IPI-145 in treating asthma and rheumatoid arthritis.

Such exuberance might seem a little on the irrational side. However, my guess is that Morgan Stanley and others are probably looking at the success that other companies have had with kinase inhibitors. Privately held Calistoga Pharmaceuticals was snatched up by Gilead Sciences (NASDAQ: GILD  ) in 2011 based on early success with its PI3K inhibitor CAL-101. Pharmacyclics (UNKNOWN: PCYC.DL  ) has seen shares surge more than 65% over the past three months on good news with its Bruton's tyrosine kinase inhibitor, ibrutinib.

Positive momentum
Celldex (NASDAQ: CLDX  ) shares popped 13% this week. There wasn't really any news from the company this week; instead, the nice gains appear to be a continuation from momentum that started last week.

A Valentine's Day announcement had Celldex investors feeling good about prospects for the company's experimental drug CDX-301. A phase 1 study of the drug in hematopoietic stem cell transplantation yielded positive results. Volunteers in the study who took CDX-301 experienced large increases in CD34+ and dendritic cells, findings that bode well for improved transplant outcomes.

Celldex also has other potential winners that are farther along in development. In November, the company announced positive phase 2 results for rindopepimut in treating EGFRvIII-positive glioblastoma. It also released good results in December from a phase 2 study of CDX-011 in treating breast cancer.

More happy thoughts
Another investment firm had happy thoughts this week, too. Mizuho upgraded Questcor Pharmaceuticals (UNKNOWN: QCOR.DL  ) from "neutral" to "buy" and raised its price target to $41 per share. Questcor's shares were up 8% for the week.

Mizuho indicated that it sees less reason to worry about on-going reimbursement of Questcor's Acthar gel. The firm also notes improving fundamentals with Questcor. The Street Ratings joined in as well, upgrading Questcor from "hold" to "buy" based on several performance metrics.

Some have speculated that insurers would clamp down heavily on reimbursements for Acthar. Fears that this could happen caused Questcor's shares to plummet last September. The stock has climbed back somewhat but is still more than 80% lower than the high hit in July.

Curb your enthusiasm?
Do investors need to curb their enthusiasm somewhat after a great week? I would say that might be prudent for Infinity. After all, the excitement is over phase 1 results. Plenty could still go wrong for Celldex, too. It's not that both companies don't have solid potential. They do. But it's still early in the game.

What about Questcor? It's one of the most debated names in biotech. Naysayers think insurance companies will ultimately quit covering the drug. They also point to possible fallout from a government investigation. Others say the stock is way under-priced and could generate fantastic gains for steadfast investors.

We dig into these high-profile issues inside our brand new premium research report on Questcor. In it, you'll learn about the key opportunities and threats facing the company, as well as multiple reasons to buy and sell the stock. We're providing a full year of analyst updates as key news hits, so make sure to claim a copy today by clicking here now.

Read/Post Comments (4) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 24, 2013, at 10:30 AM, Itsawhiz wrote:

    Keith, You mention QCOR as one of the most debated names in Biotech. Would love to see the current debate. It would most likely be one sided. Seems like Health Provider reimbursement concerns have all but gone away, except at MF. With all the Health Providers updates since September, most analysts would tell you that the recent price drop was overdone on misinformation. Six analysts covering the stock rank QCOR a STRONG BUY with price targets as high as $74 a share, median price about $43. Matter of fact, some believe that QCOR will be trading over $100 within one year based on very conservative multiples compared to the industry. Seems to me, with the latest upgrades, the current upward trend will continue barring self- satisfying negative articles written to misinform investors. Negative articles that had been publish to manipulate the market have lost their creditability. Why. Value, Growth, Earnings, Cash Flow, Acquisition, Dividend, Acthar's future growth potential with 19 indications of which only 4 explored.

    You mention the Investigation, although you failed to mention that most investigations typically result in either no or very small fines. Seems to me, that issue seems to be a non issue until any wrongdoings if any are uncovered. Although, Analysts have taken it in consideration with the stock price projections.

    QCOR financial results are to be announced this Tuesday in PM. If scripts have increased again that should be a sign of things to come. Analysts are looking for $1 EPS on revenues of about 142

  • Report this Comment On February 24, 2013, at 12:26 PM, drdonrs wrote:

    Just another in the continuing series of Motley Fool's absurdly foolish articles relating to Questcor. Full of innuendos and mistruths and false conclusions. Another shill for the repugnant short community and a blatant effort by the Fool to sell a premium report not worth the paper it's printed on. When is the fool giving up?

  • Report this Comment On February 24, 2013, at 1:37 PM, NotTheDroid wrote:

    Useless article on all fronts. Not one piece of information on any of the three stocks that is new, unique, or required even more than a copy paste from other articles.

    Some of the information is even wrong and 3 months old.

    Perfect example is the cut and paste that QCOR is 80% down from highs... really? Hmmm... my math says more like 48%.

    Silly useless Motley Fool authors trying to manipulate stocks with headlines instead of content.

  • Report this Comment On February 24, 2013, at 2:11 PM, drdonrs wrote:

    MOTLEY FOOL again I ask, "do you ever review the comments and take any corrective action in response?" Oh yes I see the answer, you are more intent on huckstering your "premium reports" which carry more of the same misinformation. Care to comment Fools?

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