The party's on. Both the Dow and the S&P 500 set record highs this week. But the celebration for investors in these three humongous health-care stocks should be the wildest of all. Let's take a look at the causes for festivity.
High fives for high T
High fives are in order for Repros Therapeutics (NASDAQ: RPRX ) . The stock skyrocketed by 83% after the company announced fantastic results from a study of its testosterone drug Androxal.
The late-stage study involved 151 men with hypogonadism, a condition resulting in low testosterone production. At the end of the 12-week study, 79% of the men taking Androxal showed normal ranges of average testosterone levels over a 24-hour period. Repros also reported that the drug was well tolerated with no patients taking Androxal dropping out of the study due to adverse events. A sister pivotal study is expected to complete enrollment in May.
I don't mean to be a party pooper, but we should also note that these gains still didn't get Repros back to its levels from earlier this year. The stock plunged at the end of January, after the company announced a large discrepancy in data reported from one of the 17 sites involved in the clinical study.
That's old news, though. If the second late-stage study has findings as good as the first, expect Androxal to compete well against AbbVie's Androgel, Auxilium's Testim, and Lilly's Axiron.
Excited about Endocyte
Analyst excitement about Endocyte (NASDAQ: ECYT ) fired up investors this week. Shares in the biotech jumped 24%.
It all started when R.W. Baird upgraded Endocyte from "neutral" to "outperform," and raised its price target from $9 per share, to $13 per share at the beginning of the week. The investment firm said that the biotech's pipeline is farther along than it first thought. Not to be outdone, Wedbush increased its price target for Endocyte from $16 per share, to $10 per share a couple of days later.
All the excitement is great, but the near-term outlook for Endocyte varies quite a bit depending on who you believe more. With the latest surge, the stock is now priced well over $12 per share. That's not far from Baird's $13 per share price target, but there's plenty of room to run in order to hit Wedbush's $16 target. While Endocyte could continue to soar, I'd caution against banking too much on what any analyst thinks.
Getting the party started early
Why wait for good news to get the party started? That seemed to be the mantra this week for investors in Sarepta Therapeutics (NASDAQ: SRPT ) . Shares rose 13%, with no announcement at all from the company.
Some of the stock's jump probably stems from comments made early in the week by Leerink. The firm stated that it thinks Sarepta will do well regardless of whether or not the company pursues accelerated approval for Duchenne muscular distrophy drug eteplirsen. My hunch is that some of the gains also came from investors fully expecting that the accelerated approval path will be taken.
I agree with Leerink's view that Sarepta wins either way. The ideal scenario for investors could actually be if the company decides not to go for accelerated approval. Any such announcement would probably result in a pullback that could present a good buying opportunity.
Sometimes, the hardest part of our weekly look at the three humongous health-care stocks is picking which one makes the best investment opportunity. All of the stocks on our list could do well. My choice, though, is to go with Sarepta. There are always things that can go wrong in biotech, but I like the odds for eteplirsen. I suspect that the hardest partiers over the long run will be those who bought Sarepta.
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