Stocks Shaking the Investment World

There are one-hit wonders, and then there are those stocks for which the initial big move is only a preview for even bigger and better gains to come.

Today, we list a pair of stocks that despite the incredible volatility in the market made some of the biggest moves higher over the past month, which we'll pair with the ratings issued by our Motley Fool CAPS community. The higher each stock's rating, the greater CAPS members' faith in that company's ability to keep on beating the market.

Stock

1-Month  Change

CAPS Rating
(out of 5)

Pharmacyclics (Nasdaq: PCYC  ) 35.6% *
Zalicus (Nasdaq: ZLCS  ) 27.2% ****

Source: FinViz.com; 1 Month % change from Feb. 8 to March 9.

While you were out, the markets turned tail and fell on concerns over Europe's fragile financial system. So before we get shaken out again, let's see what the CAPS community thinks of these stocks.

A mighty temblor
Sales of multiple myeloma treatment Revlimid account for more than two-thirds of Celgene's (Nasdaq: CELG  ) first-quarter revenues, or $860 million out of the $1.3 billion in total. Developing a drug with similar efficacy to Revlimid but fewer side effects would give its developers the potential to grab a huge share of the market.

Welcome, Pharmacyclics, a drug developer that analysts think has a drug that will challenge Revlimid for treatment of blood cancers like non-Hodgkin lymphoma and chronic lymphocytic leukemia. In midstage clinical testing 100% of the patients receiving ibrutinib responded positively to the drug, the result being Johnson & Johnson (NYSE: JNJ  ) wants to start late-stage testing later this year. The word "blockbuster" trips off the tongue of analysts regularly.

Not only have shares of Pharmacyclics jumped by more than third over the past month, but the stock is up nearly 150% in 2012 and has more than quadrupled in the past year. That's a pretty heady buildup for a company with no product on the market, which is why CAPS member bIlluminati counsels caution, noting there's a long and winding path to travel before approval, if it comes, let alone profitability.

As promising as ibrutinib sounds, the CAPS community apparently prefers a go-slow approach, as those weighing in on the stock are almost evenly divided on its potential for success. Too many times promising drugs have blown up when it comes to late-stage trials and then when they come before the FDA for review. The one-star rating the CAPS members have assigned to it suggests they believe there are safer places for your money.

Tell us in the comments section below or on the Pharmacyclics CAPS page if you agree, then add the biotech to the Fool's free and personalized stock-tracking service to be alerted of future positive developments on its path to marketability.

Read all about it!
While pain management therapy Exalgo has appropriately been the focus of attention at Zalicus because it is the one product the biotech has on the market, I've suggested investors would do well to look at the broader picture and consider its pipeline.

Its most advanced candidate, Synavive, a treatment for immuno-inflammatory disorders, has been the catalyst propelling Zalicus' shares higher this past month. It recently completed the enrollment of patients in a phase 2b clinical trial designed to evaluate the safety and efficacy of the drug. Results are expected later this year.

That's also when Zalicus is anticipating Covidien (NYSE: COV  ) will receive approval for the 32-mg dosage of Exalgo. There was a lot of consternation when the drugmaker agreed to let Watson Pharmaceuticals make generic versions of the therapy sooner, but importantly it withheld the 32-mg dosage and has previously said this higher dose is key to its achieving peak sales of $200 million annually.

Even after the run-up in its shares, Zalicus still trades more than 50% below its 52-week highs. I previously rated the biotech to outperform the market indexes because of the catalysts soon coming to the fore. It seems like the second half of the year is going to witness a convergence of events that, if they break its way, will likely propel the stock higher.

All three dozen CAPS All-Stars rating the biotech unanimously agree it should beat the Street, but you can add it to the Fool's free portfolio tracker and tell us in the comments box below where you think all the good news will put Zalicus' shares.

Shake, rattle, and roll
These two stocks shook the market this past month, but it's not just drugmakers that are setting the world on fire. Fool analysts think they've found a different kind of health-care company with plenty of upside. You can read about it in their new free report "Discover the Next Rule-Breaking Multibagger." Get your copy for free.

Fool contributor Rich Duprey holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Covidien and Johnson & Johnson. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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