Watchlist 2011-10-30

A few biotech stocks (with near term catalysts) that I will be watching:

Vivus Inc. (VVUS) - one of the most-watched biotech companies late last year with an obesity drug candidate, QNEXA, whose approval was DENIED by the FDA on 2010-10-29 based on birth defect and cardiovascular concerns.  We are expecting to hear FDA's acceptance of QNEXA's NDA resubmission (likey by tomorrow 2011-10-31).  A PDUFA action date will be assigned when this occurs and we may see a quick hike-n-slide play.

Pacira Pharmaceuticals (PCRX) - PCRX is expected to deliver a press release Monday morning to disclose the outcome of FDA's decision on EXPAREL, which had an PDUDA date of 2011-10-28 (last Friday).  It is widely speculated, based on rumors, that FDA has approved the drug.  We will see lots of trading actions tomorrow morning.  Unfortunately, no PCRX options are available for trading, making it less attractive for a slide play.

BioSante Pharmaceuticals (BPAX) - though the original November PDUFA date for Company's Bio-T-Gel  has been delayed to 2012-02-14, investors' appetites for this stock have not decreased.  In fact, BPAX hiked up 17% last week as more investors turned their attentions to the results of Libigel's pivotal trial data, to be announced some time in December.  Should the markets remain strong, another great week for BPAX should follow!

pSivida Corp. (PSDV) - PSDV has a PDUFA date next week (2011-11-12) for ILUVIEN.  Stock popped 12% on Friday.  Based on the high call/put option ratio, most investors are betting on ILUVIEN's approval.  This is an interesting stock to follow.

Staying active while seeking opportunities in Biotech

If you haven't noticed, I have posted significantly fewer number of articles since August (2011).  Why?!  Well (besides my newly arrived baby boy), plainly put, the landscape of biotech trading has changed drastically.  Many companies that people thought were great 'Hike' targets based on major catalyst events (PDUFA, clinical trial results, NDA filing/acceptance) never saw the 'Hike' that was highly anticipated and once foreseeable.  Correspondingly, the magnitude and predictability of 'Slide' have also been diminished.  As a result, it take a lot more patience and discipline to execute trades following what was once 'predictable' patterns.  Undoubtedly, it has been tough and head-scratching for many biotech enthusiasts for the past several months, but, moving forward, people should continue to remind themselves of the following principles which will, in my mind, sustain the viability and profitability of biotech stocks and options trading:


1) Biotech will ALWAYS thrive - big pharmas simply lack the focus, energy, and agility that small biotech companies possess to develop new therapies and innovative medical devices; licensing and acquisition by big pharma will still be the key theme in the coming years


2) Big news events in biotech will ALWAYS drive hype - major news networks, trading forums, and even social media (such as Twitter) continue to be valuable sources of information/misinformation that help stimulate the excitement about a particular event (e.g., drug approval), which in turn leads to volatile stock prices that traders can take advantage of

3) Biotech stocks/options will ALWAYS yield high percentage profit - I know this one is tricky and may not be as convincing in a tough market, but when the economy stabilizes, small cap biotech will be one of the first places where traders will pour their money back into.  Particularly with stock options, high percentage profit in a short time can easily be achieved (I remember when 100+% gains in a matter minutes were the norm just before the summer of this year).   


All in all, I will continue to seek opportunities in biotech and share them with you here.  However, I will be using Twitter as my primary trading news tool on a day-to-day basis.  There is a Twitter Feed column to the right of this blog where you can view my most recent tweets.  Note that I will also stay an active trader even when I don't see any good trades in biotech - I do this by trading broad market indices and a few tech companies.  Follow me on Twitter (@MichaelJuan01) for more trading updates.  As usual, good luck to you all!