Month End Closing takes some Biotech stocks Lower

I have been watching certain Biotech stocks [ISIS (long), INCY (none)] over the past several weeks. Both have had fairly good gains, but today, as the market is down ~0.5%, we see that both of the stocks mentioned above are down 3% or so. While fundamentally no news has come out to bring them down more than the general market sentiment, it leads me to surmise that this might be due to month end closing of books and rebalancing of portfolios at some institutions.
That could be one cause of higher selling volume and consequent price drop. However, from technical standpoint, INCY is shying close to the 50 dma so it cuts through and goes below (21.4) the risk of it falling further is enhanced, barring any other major news.
No specific direction offered on either stocks for now. "Hold" is the word.

INCY - Exited Position

Based on insider sales transactions in mid- May (link-Y! Finance) where an "officer" sold $5 million worth of INCY shares, we feel that it is better to reduce risk exposure in INCY.

Additionally, there has been reports of GS upgrading INCY and labeling them as a potential takeover targets. End of the day it is still a few people's opinion, whether they work at GS or other equity research firms. That essentially boils down to "speculation" and usually it is sell side analysts that make public announcements like this.

Consequently, while we also feel that the odds are good that INCY might be taken over sometime over next year, we feel that it might be better to reduce capital outlay. Hence, we have sold out our INCY position yesterday (at 23.33). we might reenter shortly via long call options (strike undecided).

Biotech: New Positions Initiated

Dynavax (DVAX) initiated at 3.32 on Friday Jan 6th, 2012 and closed at 3.62 for small profit. But might get back in using $5 Apr or July calls options.

INCY - initiated again at 16 for long term hold after some back and forth trading between 13.80 and 15. Missed the move from high 14's to the 16 due to lack of cash flow!! arggh!

Other stocks (no positions but good hopes): VRTX.


Current holds: MDCO (worth adding more in 18.50 to 19.20 range). LONG!!!

Coin Toss Method : INCY

After careful analysis of several factors that seem to affect share price of companies traded in the stock market, we have decided to make a forecast on some companies based on hope and coin tosses:

Incyte (ticker: INCY) - upgrade - new price target : $ 24 by December 17, 2011.

Nokia ADR (ticker: NOK) - upgrade - new price target - $ 10 by January 31, 2012.

Tata Motors (ADR) (ticker: TTM) - neutral to downgrade - price target - $ 18.50 by November 16, 2011 then eventually rising to $ 26 by March 1, 2012.

Medicines Company (ticker: MDCO) - new price target - $ 24.50 by December 30, 2011

All price and time forecasts are based on a healthy expected rate of return on investments held by me. There is no guarantee these stocks will behave as predicted, but if they did, I would be very happy and somewhat profitable! This is not a recommendation to buy or sell these stocks and definitely not a recommendation to short any of these.

INCY submits new Drug Application

Incyte Corp, encouraged by data from ruxolitinib for mylefibrosis, submitted a new drug application NDA to the FDA, requiring priority review.

http://finance.yahoo.com/news/Incyte-Submits-New-Drug-bw-2609692740.html?x=0&.v=1

This puts INCY and Novartis NVS substantially ahead of YMI Biosciences (YMI) if approval goes through in the right time frame.

ASCO Abstracts out

INCYTE Corporation - a small molecule cancer drug research company - has four abstracts in ASCO 2011. (link)

Incyte has collaborative agreements with Pfizer PFE, Eli Lilly LLY and Novartis NVS.

The abstract of highest current interest is the one on which Incyte is working with Novartis. (a Phase III trial).

Supergen has two abstracts.. I was kinda surprised (link) and phase I clinical study of an oral inhibitor

Ok, more information will be added during the evening. Have to do AH trading now..ciao

Vical has posted a very clear abstract on what they have done/found/plan to do.

Abstract:
Background: Allovectin is a plasmid-based immunotherapy expressing HLA-B7 and β2 microglobulin genes designed to stimulate both local and systemic anti-tumor responses. In a phase II single-arm study, VCL-1005-208 (2 mg, intralesional injection in 127 subjects), overall response rate (ORR) was 11.8% and median overall survival (OS) was 18.8 months. Median duration of response was 13.8 months and all responses were durable (> 6 months). A subsequent phase III trial (LX01-315) recently completed enrollment of 390 pts in more than 90 sites in 15 countries. Subjects in phase II with characteristics corresponding to those in this phase III study (chemonaïve with a single lesion injected) had an ORR that was 17% and median OS was 22.5 months. Methods: A time-dependent covariate (TDC) analysis with the Cox proportional hazards model (SAS/STAT PROC PHREG) was used to evaluate the relationship between a time-varying covariate (responder status) to survival in the phase II study. The Cox model analysis combines these results across times (one time point per death) to yield a single p-value for the prognostic significance of responder status. Results: In our analysis of the VCL-1005-208 data, each patient had a single covariate, responder status that permanently switched from 1 to 0 when a non-responder became a responder. The single covariate approach tested the hypothesis that responder status predicted survival. The resulting hazard ratio for the TDC was 4.13 (95% CI: 1.67-10.25, score test p-value=0.002), which is relatively large and highly significant. A simpler analysis, using responder status as if it were a baseline covariate, gave a hazard ratio of 4.82 (95% CI 1.95-11.89, p-value<0.001). The TDC analysis indicates that in a small, open-label phase II trial, responder status strongly predicted survival. Analysis of two other trials (using 10 mcg DNA), VCL-1005-205 (phase II) and VCL-1005-301 (phase III), showed similar results. Conclusions: In three Allovectin melanoma trials, response was a strongly significant predictor of survival and may serve as a marker of clinical benefit for this novel class of cancer immunotherapeutic agents.

Moody's, Standard and Poor's and McGraw Hill are all OPINION BLOGGERS now

Well, i don't know if they blog or not, but the so-called ratings given by all these agencies is merely as First amendment expression. So they are about as close to poets, singers and other artists if you will. Only in this case, by hiding under the first amendment umbrella, all these rating agencies are clearly telling us that they are as responsible and credible as your regular internet blogger.

Check out the lawsuit dismissal news on Yahoo finance.

 I am not short on Moody's only because I don't have enough money to go short on this when I can short other beautiful cases like St. Joe's etc.
or flip INCY YMI etc for easy 50% gains..

As always, all opinions listed here are covered by the 1st Amendment and nothing is a recommendation to buy or sell. ;) ;) Cha ching,.

General Notes (CGNX CRR RSTI INCY BG TTM)

There is a guy named James Stewart that wrote about this and some other stocks in Mar/April..

he had also listed CRR (carbo ceramics) Rofin-Sinar RSTI CGNX and few others..

I am kicking myself for not getting into CGNX some days back.. of course it is risky around earnings but then rewards are big.. oh well..

separately i did my own analysis on LYB, made profits between Apr 10 to Apr 28 but did not  hold it through earnings (chickened out).. Big mistake again.. lol.

only winners I am holding are Bunge BG and INCY

on a side note, I went long on TTM today @ 26.15. Let us see how this plays out

STOCK WATCH: SNTS CLDX INCY ISIS

Watch out for these pharma/biotech stocks to show increasing activity in the next couple of months.

SNTS: Has fair amount of cash on hand ($100 million), low debt, great pipeline and good revenue (2009- $180 million). The company also has a low float so any positive action would trigger large increases in price due to short covering. Also the possibility of a takeover is quite high.

CLDX: Although PFE snapped ties with CLDX, there is a likelihood that some other pharma company might snap it up! They have sufficient cash on hand to go forward for now. (speculative play - depending on their trials etc)

INCY: This stock has been doing quite well on a technical basis and performing on its own right as a pharma company. Look to INCY climbing after earnings and also to around well over $25 by the end of the year.

ISIS: Receiving payments and royalties on a regular basis, ISIS has been a steady performer, with recent partnerships with  GSK and also (Regulus with Sanofi) ISIS is a strong player in the mRNA market. ISIS did two positive Phase 3 studies of mipomersen in the past year and once that drug (Sold by Genzyme) gets marketing approval, the royalty payments would increase. For technical traders, if ISIS breaks 10 and holds, then there can be significant upside.