Why Isis Pharmaceuticals Inc. Shares Vaulted Higher Again

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Isis Pharmaceuticals (NASDAQ: ISIS  ) , a biopharmaceutical company developing a wide array of therapies utilizing its antisense drug development platform, vaulted higher by as much as 12%, its second straight day of double-digit percentage gains, this time following positive commentary from Piper Jaffray.

So what: According to Piper Jaffray, and basing its opinion on top of yesterday's announcement that ISIS-FXI delivered notable reductions in venous thrombotic events following total knee replacement surgery relative to the placebo, the research firm called Isis "arguably the most attractive and undervalued pipeline in biotech, in our view." Furthermore, Piper Jaffray notes, per Barron's, that "The systemic undervaluation of the pipeline could be corrected by a new management attitude, a new management team, or a company acquisition." Piper Jaffray specifically mentions Biogen Idec or Gilead Sciences as logical buyout partners.

Now what: First of all, the usual spiel: remember that analyst actions are rarely long-term drivers of a stocks' share price and they very rarely are going to change your long-term investment thesis on a company. This is a case, however, where I almost agree wholeheartedly with Piper Jaffray. I can't say I'm in total agreement that a buyout would be in order as Isis has done a good job of licensing out portions of the its pipeline to fund additional clinical research, but with close to three dozen studies currently under way it is arguably one of the deepest and most undervalued biotech pipelines around. As I said yesterday, if you don't have Isis on your watchlist, you might miss out on a big moneymaking opportunity.

Isis shares may have soared again, but they could struggle to keep pace with this top stock over the long run
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