Biotechs are infamous for trading sideways for what feels like forever. And then one day, they suddenly wake up and make massive leaps to the upside. With that in mind, here's a look at three of the biggest winners in the sector last week.
Idenix Pharmaceuticals (UNKNOWN:IDIX.DL) is a developmental stage pharmaceutical company that saw its shares move 25% higher last week, with a massive 44% jump on Friday on unusually high volume.
Last June, the Food and Drug Administration placed the company's hepatitis C drug candidate IDX20963 on hold, requesting more preclinical safety data. Since then, short-sellers have taken out a huge bet against Idenix, holding more than 17% of outstanding shares.
Friday's jump appears to reflect greater optimism about the company's pipeline, and possibly some short covering as a result. Recently, Idenix announced that IDX20963 was cleared for clinical trials in Canada and Belgium, and samastivir, a NS5A inhibitor, completed patient enrollment in a mid-stage trial.
Idenix has a decent cash position of approximately $148 million and, therefore, shouldn't need to raise additional cash soon. That said, the company is well behind the 8-ball in the hepatitis C race, with a number of big pharmas expected to launch effective medications in the near future. As such, I am not optimistic that this move is sustainable in the long run.
Osiris Therapeutics (NASDAQOTH:OSIR) is a stem cell company developing therapies for inflammatory, autoimmune, and cardiovascular diseases. Shares of Osiris rose 19% last week, with a spectacular 33% rise on Friday alone due a strong earnings release. Specifically, Osiris reported a 220% jump in revenue compared to the same quarter last year. Most importantly, Osiris sold Prochymal for what amounts to $100 million in upfront and royalty payments, and this move eliminates a major cost that was weighing heavily on the bottom line.
The liquidation of Prochymal combined with increasing sales of Osiris' wound healing products, Grafix and Ovation, have turned the company into a cash generator, instead of a cash burner. With a strong pipeline, zero debt, and increasing revenue, Osiris's rapid rise last week may be only a taste of things to come. Foolish investors would be wise to stay tuned to this developing health care story.
Dyax (UNKNOWN:DYAX.DL) is a pharmaceutical company focused on developing treatments for hereditary angioedema, or HAE. Shares of the company have doubled in price this quarter, with last week's action being particularly impressive.
Investor interest in Dyax is increasing for a couple of reasons. Firstly, sales of Kalibotor, a treatment for acute HAE, have been increasing nicely over the past year. Secondly, Dyax has completed dosing for its game-changing prophylactic treatment for HAE in an early stage clinical trial. With results expected next January, investors are starting to jump on the Dyax bandwagon in droves. Finally, the company completed a round of financing recently that greatly strengthened its balance sheet, allowing them to continue their clinical activities unimpeded. Adding fuel to the fire, Dyax also has a couple of interesting late-stage cancer drug candidates licensed out to major players such as Amgen and Eli Lilly that reported positive results recently. With a pending clinical catalyst in January and improving sales, I've just recently put this stock on my radar and will be following it closely in the coming months.