Why You Should Watch Ariad and Supernus Today

Good morning, fellow Fools! It's time to check in on the movers and shakers in health care today.

Will Ariad continue to rally?

Ariad Pharmaceuticals (NASDAQ: ARIA  ) looks to continue its rally today following the announcement last Friday that the U.S. Food and Drug Administration, or FDA, approved a revised Prescribing Information and a Risk Evaluation and Mitigation Strategy for the company's leukemia drug Iclusig. Per the revised label, Iclusig can now only be prescribed to patients with chronic myeloid leukemia who have failed to benefit from or are ineligible to take other alternative therapies, including Novartis AG's (NYSE: NVS  ) Gleevec. Gleevec is currently a first-line treatment, whereas Iclusig is now a treatment of last resort in many ways.

What's my take? It's important to understand that Ariad shares have now rebounded more than 200% since imploding upon the FDA placing a partial clinical hold on Iclusig last October. Even more importantly, you should keep in mind that Iclusig is not a game-changer for Ariad. Despite being the company's only commercially available drug, Iclusig raked in less than $17 million in the third quarter, giving the company a $66 million net loss for the quarter. Given that Ariad's market cap is now a staggering $1.3 billion following this rally, I think Foolish investors would best be served by taking a pass on this one.

Supernus may pull back today

Supernus Pharmaceuticals (NASDAQ: SUPN  ) looks like it will pull back today after soaring more than 13% last Tuesday. The stock is now up close to 20% over the last few sessions alone.

Supernus's rally was sparked by the FDA approving United Therapeutic's (NASDAQ: UTHR  ) pulmonary arterial hypertension drug Orenitram. Orenitram was co-developed by Supernus, and the company will receive milestone and single-digit royalty payments as a result. Per the agreement, Supernus could receive a $2 million milestone payment based on the approval.

What's my view? I think this pullback is healthy. The licensing deal doesn't appear to be a game-changer for Supernus, unless Orenitram sales are out of sight. Overall, this approval is a much bigger deal for United Therapeutics.

Top Stock for 2014

There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

None


Read/Post Comments (1) | 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.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2776415, ~/Articles/ArticleHandler.aspx, 9/16/2014 1:59:16 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement