3 Humongous Health-Care Stocks This Week

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Part of the federal government remains shut down. There's no final deal yet on raising the U.S. debt ceiling. But shareholders of these three humongous health-care winners didn't care. Here's why.

Up, up, and away
To say that the past six weeks have been good for TherapeuticsMD (NYSEMKT: TXMD  ) is a huge understatement. Shares of the women's health-care pharmaceutical company have more than doubled during that period. A nice chunk of those gains came in the past week, with TherapeuticsMD shooting up 26%. 

The company reported some good news on Wednesday. Its phase 1 study of TX 12-001-HR, an oral capsule that combines 17 beta-estradiol and progesterone, suggested that bioavailability was similar to the hormones taken concurrently. TherapeuticsMD's drug is the first oral combination of the two widely used hormones used in alleviating symptoms of menopause.

A pivotal phase 3 study for TX 12-001-HR began last month with the first patients enrolling. The study will include 1,550 patients to determine the efficacy and safety of the drug. 

Animal spirits
Add Aratana Therapeutics (NASDAQ: PETX  ) to the list of niche health-care stocks with extremely positive momentum. Shares are up more than 150% since the company went public in June. Aratana gained nearly 23% in just the last week.

There wasn't any major news for Aratana this week, but that didn't stop investors from continuing to pour money into the stock. Part of the reason for the recent climb stems from last week's addition of the stock to the Russell 2000 Index, the Russell 3000 Index, the Russell Global Index, and the Russell Microcap Index. 

While Aratana doesn't have any products on the market yet, the company counts three drugs under development that could receive regulatory approval in 2016. A growing market for pet medications could generate sustained investor interest in this stock.

Soaring by design
Shares of Cell Therapeutics (NASDAQ: CTIC  ) soared 20% this week. The nice gains came from an agreement with the U.S. Food and Drug Administration over the design of a late-stage study for myelofibrosis drug pacritinib.

The upcoming study will compare pacritinib against Jakafi, which is marketed by Incyte (NASDAQ: INCY  ) in the U.S. Incyte has experienced considerable success with Jakafi, with sales climbing 82% year over year in the most recent quarter. Cell Therapeutics plans to enroll 300 patients in the 24-week study. If the results are successful, pacritinib could present a significant challenger to Jakafi in the myelofibrosis indication.

Cell Therapeutics also counts a couple of other drugs in late-stage studies in addition to pacritinib. Pixuvri, which already received conditional approval in Europe as a third-line treatment of non-Hodgkin lymphoma, is in a phase 3 study as a second-line treatment for the disease. Opaxio is in a phase 3 study for treatment of ovarian cancer as well as a phase 2 study for glioblastoma multiforme. 

Looking ahead
All three of these companies could see even brighter days ahead. Positive clinical results could easily propel valuations for any of these stocks much higher. Of course, any missteps along the way would send shares downward.

Of this week's humongous performers, I am most intrigued by Aratana. The company's focus on pet medications carries several advantages, not the least of which is the favorable economics of developing for animals rather than humans. Aratana could experience a pullback along the way, especially if the overall market encounters major headwinds. However, I think this is a stock that investors should watch closely.

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9/26/2016 3:00 PM
CTIC $0.38 Down -0.01 -1.35%
CTI BioPharma CAPS Rating: **
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TXMD $6.57 Up +0.16 +2.50%
TherapeuticsMD CAPS Rating: No stars
INCY $88.80 Down -0.18 -0.20%
Incyte CAPS Rating: **