Nutrisystem, Clovis, Synta, and Incyte Could Be Big Movers Today

This morning, four stocks could make some big moves -- Nutrisystem (NASDAQ: NTRI  ) , Clovis Oncology (NASDAQ: CLVS  ) , Synta Pharmaceuticals (NASDAQ: SNTA  ) , and Incyte Pharmaceuticals (NASDAQ: INCY  ) . Let's take a closer look at the news stories moving these stocks.

Nutrisystem could put on a few pounds this morning
Nutrisystem is poised to gap higher today, after the manufacturer of weight loss products reported strong third quarter earnings after yesterday's market close.

The company earned an adjusted $0.15 per share, up from the $0.10 it reported in the prior year quarter, marking the fourth consecutive quarter that it has topped the bottom line consensus estimate. Its revenue climbed 5% year-over-year to $85.4 million. Shares rallied 12.5% after hours on October 29, propelling the stock toward fresh 52-week highs. The stock is up more than 50% over the past 12 months.

Nutrisystem primarily competes with Weight Watchers International and Medifast. All three weight-loss companies have been facing tough competition from fitness and calorie-tracking smartphone apps and gadgets such as the Nike Fuelband, which are considered lower-cost alternatives to their paid programs.

Nutrisystem sells monthly food supplies, which are balanced with recommended daily allowances of dairy products, fruit, vegetables, and low-sugar carbohydrate products. The company also sells frozen foods and weight management programs.

Clovis Oncology's wild ride could continue
Clovis Oncology is also poised to make a big move today. The stock fell 3.6% during regular trading yesterday, but rallied 8.5% after hours after analysts at Citigroup declared that Clovis' non-small cell lung cancer (NSCLC) drug, CO-1686, would be competitive with AstraZeneca's (NYSE: AZN  ) AZD9291 in terms of efficacy and safety. In addition, Citigroup retained a "buy" rating on Clovis with a price target of $109 -- suggesting that the stock could nearly double from current prices.

Both Clovis' CO-1686 and AstraZeneca's AZD9291 stand out from other NSCLC treatments because they are focusing on resilient "second site mutations", which causes cancer cells to become resistant to the two leading NSCLC treatments on the market -- Roche's Tarceva and AstraZeneca/Teva's Iressa. Credit Suisse believes that if approved, CO-1686 could generate $1.2 billion in annual peak sales for the company -- which could finally put the pre-revenue biotech on the map.

However, Clovis has taken investors on a wild ride over the past year.

CLVS Chart

Source: YCharts.

That roller coaster of volatility was caused by three major events:

  • The failure of its former lead drug candidate, the pancreatic cancer drug CO-101, nearly cut its market cap in half last November.

  • Shares more than doubled in June after Clovis reported positive phase 1 results for CO-1686, a new lung cancer drug which became its new lead drug candidate.

  • In August, Clovis announced that it was looking for a buyer, but later disclosed that no one was interested -- causing shares to fall again.

Although Citigroup's positive opinion of CO-1686, investors should be careful when investing in Clovis -- it is a highly volatile, unpredictable stock.

Synta Pharmaceuticals could keep sliding
Synta Pharmaceuticals, which plunged 20% yesterday after it reported disappointing mid-stage trial results for its leading NSCLC treatments, could either bounce or continue sliding today.

Synta's NSCLC drug, ganetespib, was administered to patients with the chemotherapy treatment docetaxel to reduce the risk of death. A combination therapy of ganetespib and docetaxel reduced the risk of death by 25%, but it was a slimmer reduction than what many investors had expected -- especially since ganetespib, a HSP90 inhibitor, is considered a "next generation" cancer treatment. The company had previously forecast a reduction rate of 39%.

Nonetheless, Synta is continuing with phase 3 trials, and intends to release the full phase 3 data next year in hopes of receiving an FDA approval. However, it could be a long shot, considering that since no HSP90 treatments have been approved by the FDA yet, Synta might need to show higher efficacy rates to successfully cross the finish line.

Incyte Pharmaceuticals makes progress in inflammatory diseases
Last but not least, Incyte Pharmaceuticals recently announced positive results from a phase 2 trial testing its proprietary oral JAK1 inhibitor, INCB39110, as an oral treatment for rheumatoid arthritis.

INCB39110 previously showed promising results for the treatment of psoriasis, another inflammatory disease. The results from these two tests indicate that the treatment shows promise as a potential treatment for inflammatory diseases -- one of the largest markets in the pharmaceutical industry today.

Incyte is best known for its sole marketed product, Jakafi (Jakavi), which is an approved treatment for myelofibrosis, a type of bone marrow cancer. Incyte holds a collaborative agreement with Novartis to market the drug outside the United States.

Incyte's revenue primarily comes from two primary sources -- direct sales of Jakafi and product royalty revenues. Last quarter, direct sales of Jakafi soared 83% year-over-year to $54.1 million, accounting for 53% of the company's total revenue. Shares of Incyte are up more than 140% over the past twelve months.  

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