A rising tide lifts all boats, but the opposite isn't true in the stock market. The major indexes slipped this week, while a handful of health-care stocks soared. Here are three humongous performers over the last week.
Double play (almost)
It's not too often that a stock doubles in a single day, but that's what happened for Osiris Therapeutics (NASDAQ: OSIR) on Tuesday. While shares see-sawed a bit over the next few days, Osiris finished the week up by a whopping 86%.
All the excitement stemmed from overwhelmingly positive results in a clinical study of Grafix, Osiris' treatment for diabetes-related foot ulcers. The study found that Grafix was three times more effective at closing wounds than the current standard of care. This news was so good that pre-specified stopping rules for the study were implemented.
Osiris is now savoring the prospects of commercializing Grafix. There are 25 million Americans with diabetes, and around 25% of them develop foot ulcers. That's a big market -- and one that Osiris has a good chance of dominating judging from the great clinical results.
Skin in the game
The market reacted with indifference for the most part a little over a week ago, after Anacor Pharmaceuticals (NASDAQ: ANAC) announced its quarterly results. It was a different story for the company this week, though, with shares jumping nearly 33%.
Anacor didn't announce any clinical results or mergers, but another event apparently delivered some sizzle to its shares. On Tuesday, Geoffrey M. Parker, Anacor's CFO, bought 50,000 shares of his company's stock. Parker purchased more than 43,000 shares in June.
It seems likely that Parker is optimistic about Anacor's prospects for obtaining approval next year with onychomycosis drug tavaborole. The company recently filed its New Drug Application, or NDA, for the drug and anticipates a decision from the Food and Drug Administration by mid-2014.
If tavaborole wins approval, Anacor could face competition from Valeant Pharmaceuticals' (NYSE:BHC) efinaconazole. Valeant received a complete response letter from the FDA in May but expects to receive approval for efinaconazole in the second or third quarter of 2014.
Getting an edge
Only days after posting horrendous weekly performance, shares for Novavax (NASDAQ:NVAX) jumped 14% this week. The nice bump came after an analyst increased his price target for the stock and had some very positive comments.
William Tanner with Lazard Capital said that Novavax's respiratory syncytial virus, or RSV, vaccine in a phase 2 study "could be one of the most underappreciated assets in the industry." He thinks the vaccine could show better efficacy than Synagis, which is marketed by AstraZeneca's (NASDAQ:AZN) MedImmune business unit. Lazard raised its price target for Novavax from $4 per share up to $11.
Synagis has been on the market for almost 15 years. The vaccine achieved sales in 2012 of just over $1 billion. If Tanner is correct in his assessment, Novavax could be poised to capture market share away from its rival in the next few years.
Getting even better
Which of this week's humongous stocks could perform even better over the next year or so? I think Osiris looks to be the most likely candidate.
The U.S. market for diabetic foot ulcer treatments is around $2 billion annually. With Grafix showing huge improvement over the current standard of care, it seems quite likely that Osiris will capture a significant chunk of that market. Even with this week's big run-up, the company's market cap is still under $700 million. I think it could go much higher, assuming Grafix gains regulatory approval.