biotech

Summertime BAD for smallcaps and ESPECIALLY biotech. Most biotechs will peak about 2 - 4 weeks AHEAD of ASCO - except the names which actually release UNEXPECTED blockbuster type news. Most bios which have big runs from Jan/Feb into ASCO will lose all of the moves and even more the few weeks/months after ASCO.

The reason behind this is that most oncology related stocks save up all their data presentations for this - most will be "non events" - but the stocks move up in anticipation - sort of a buy the rumor - sell the news. The summer tends to be void of any significant large conferences and most companies won't have any major releases of news/data until mid/late fall. The lack of buyers into normal selling causes overreactions as the buyers for the "big news" become sellers and locking in profits. Liquidity is thin and normal buyers will tend to be less involved - causing any significant selling to result in bigger then normal price drops "for no apparent reason"

If you're an experienced biotech investor or a novice - you probrably know and understand MOST biotechs are development stage companies.  This is Wall Street "speak" for they lose money and many of them are in a continual state of scrambling for cash.  When a company has great science but poor cash many times it's an unfortunate "trap" for the investor.  I am publishing some of our firm's research which is an "estimate" of current cash reserves and more importantly - NET CASH, which gives an idea how much the company has after paying off all debt and liabilities.

NOTE: You can download the attached FULL PDF

We upgrade our rating to BUY from HOLD based on our increased conviction for compelling Phase II results for TH-302 in combination with standard chemotherapeutics.

with an orginal PDUFA date 7/30/2009  potential delay to no later then 10/30/2009 (FDA decision could come any time after 7/30 but its unusual for the FDA to go early) Transcept is the result of a reverse merger of Transcept (private company) and Novecea (NOVC) Novacea was bought for the cash and the resulting company is under the radar of most biotech investors as well as Wall Street.  Now you have a company that isn't followed by the street or any biotech analyst which has a drug thats already through all phase 3 tests and is just waiting on FDA decision.   They have a big wad of cash to boot meaning they won't need to do any dillutive financings.  This interesting trade pote

• Product Development - Hypoxic Depth Charge - Threshold Pharmaceuticals has preliminary Phase I/II data showing that its TH-302 hypoxia-activated prodrug (HAP) could kill cells in hypoxic regions of tumors where chemotherapy doesn't reach.
From BioCentury - http://www.biocentury.com
 
By Aaron Bouchie
Senior Writer