On a day when the Dow Jones Industrial Average (INDEX: ^DJI ) surged 291 points as positive consumer-spending data from Black Friday rolled in, significantly larger moves happened in the health-care sector.
For instance, YM Biosciences (AMEX: YMI ) went the opposite direction, plunging by more than 18% on no news. The company put out a press release last week acknowledging strange bearish trading on its shares but denied being aware any known material information that would cause such a negative change in sentiment. After recovering from the downdraft that took shares from $1.53 to $1.03, prices have nearly eroded back to that lower level.
But instead of dwelling on YM's substantial decline, let's focus on what went right. Here are five biotech stocks that each managed double-digit gains today.
|Avanir Pharmaceuticals (Nasdaq: AVNR )||27.50%|
|ONYX Pharmaceuticals (Nasdaq: ONXX )||14.11%|
|Momenta Pharmaceuticals (Nasdaq: MNTA )||12.56%|
|Arena Pharmaceuticals (Nasdaq: ARNA )||11.80%|
|Micromet (Nasdaq: MITI )||11.20%|
Source: Yahoo! Finance on 11/28/2011.
For investors in Avanir and Momenta, no news turned out to be good news. Avanir's surge was accompanied by triple the volume, while Momenta managed its gain on lower-than-average trading. For the other three companies, specific events propelled them forward.
ONYX managed a 14% gain after reports swirled that the company is looking to be bought out. The company currently has Nexavar on the market and potentially two other drugs, regorafenib and carfilzomib, that are through phase 3 trials and that it can collect revenue from. As exciting as this news is, investors need to remember that wanting a tasty takeout in biotech is a lot easier than actually getting it done.
Arena received an upgrade from analyst Piper Jaffray and is now regarded as "overweight," much like the patients it seeks to treat. The analyst noted that the Arena's drug locaserin was "the safest weight-loss therapy for the majority of obese patients" and that "a marked improvement in the regulatory environment" could lead to a positive outcome for the company in 2012. The FDA has already received resubmitted applications from one of Arena's rivals, VIVUS, but it agreed to limit its indication. Being first by a few months matters less if Arena will have an easier time marketing its product to a wider patient population.
Finally, Micromet announced that it had begun a midstage trial for its drug candidate blinatumomab in patients with leukemia. Over the summer, Micromet announced impressive results for blinatumomab, albeit in a pretty small trial population. Still, investors are rightly excited about the potential efficacy of Micromet's lead drug. Similar success in a larger trial would significantly strengthen its case for approval.
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