Christmas came just a little early over the last few days for some investors. Here are three health-care stocks giving some of the most humongous presents to shareholders this week.
Elf -- and Iclusig -- on the shelf
It's that time of year that many families play "elf on a shelf." For Ariad Pharmaceuticals (NASDAQ: ARIA ) , Iclusig on the shelf sounds even better. On Friday, the U.S. Food and Drug Administration granted limited approval for leukemia drug Iclusig to be marketed again in the United States. Ariad's stock shot up faster than a North Pole reindeer, soaring 65% for the week.
Back in October, the FDA yanked Iclusig from the market because of serious safety concerns that the drug caused blood clots. That decision followed a clinical hold placed on a phase 3 study of Iclusig two weeks earlier. At the time, Ariad said it was talking with the FDA about a path to sell Iclusig again. Few expected the company to find success so quickly.
Iclusig will now be available basically only when all other treatment options have been exhausted for patients. Ariad will also have an opportunity to potentially expand the label if further studies show that the drug is safer at lower doses. That will take a while, but things look brighter now for the biotech than they have in months.
A gift horse's mouth
Remember the old adage about not looking a gift horse in the mouth? Novavax (NASDAQ: NVAX ) enjoyed a gift horse's mouth in the form of positive comments by investment firm Wedbush. Shares galloped 28% higher.
Wedbush analyst Gregory Wade predicted success for Novavax's respiratory syncytial virus and flu, or RSV-F, vaccine. Wade said that sales should reach close to $1 billion in the U.S. and Europe by 2020. As a result of the rosier outlook, Wedbush raised its price target for Novavax from $4 to $12 per share.
While prospects look bright for Novavax's RSV-F vaccine, that's not the only potential winner for the company. Novavax also has clinical studies under way for seasonal and pandemic influenza vaccines as well as partnerships with companies to develop vaccines for avian flu, malaria, and other diseases.
It might be fitting for the staff at the FDA to wear red coats with white trim and sport white beards as far as Omeros (NASDAQ: OMER ) is concerned. The FDA became Santa for the biotech this week, granting orphan drug status for the company's experimental drug OMS721. Shares surged 27% higher for the week.
OMS721 targets prevention of complement-mediated thrombotic microangiopathies, or TMAs. Omeros announced positive initial results from an early stage study of the drug in November. The company expects to announce more results from that study early next year.
Orphan drug designation gives Omeros several advantages. For one thing, the approval process is accelerated. The company also gets tax breaks for its clinical trials conducted in the United States. Last, but not least, if OMS721 wins approval, the orphan drug status allows for seven years of market exclusivity.
The gift that keeps on giving
In that great holiday movie Christmas Vacation, Clark Griswold receives a membership in the Jelly of the Month Club as his bonus. Cousin Eddie's take was that it was the "gift that keeps on giving." Which of this week's humongous health-care stocks could best meet Eddie's description? I'll go with Novavax.
Given the need for a RSV-F vaccine, my hunch is that Wedbush's prediction that Novavax could hit peak sales of almost $1 billion doesn't seem too high. Even after the big uptrend over the past couple of months, the company's valuation is still just around $1 billion -- equal to potential peak sales for this one vaccine in the company's pipeline. While it's always easy for smaller drugmakers to quickly move from the nice list to the naughty list, I think Novavax has a good shot at living up to Cousin Eddie's standard.
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