With January
effect not producing the most promising results for the overall market, one
sector that did was the pharma sector.
So far this
year, this sector has produced eight of the top 10 percentage gainers.
The sector,
primarily known for producing big winners and big losers, has rewarded
investors that did their homework and were willing to accept the huge risks
associated with owning these issues.
Let’s examine
the top three gainers of 2014, all from the pharma sector.
Topping the
list with an incredible 450 percent gain is Intercept Pharmaceuticals (NASDAQ: ICPT). After ending 2013 at $68.28,
Intercept skyrocketed to $497 in the next seven trading sessions, retreated to $235 and now changes
hands around $360.
Following
the announcement that the FLINT trial of obeticholic acid had been stopped
early and the NASH primary endpoint had been met, Intercept rallied from its
January 8 close ($72.39) to $275.87 the following day.
This
significant breakthrough in the development and commercialization of novel
therapeutics to treat chronic liver diseases was enough to ignite a buying
frenzy on Wall Street.
The surge
gained more momentum the next day as the Wall Street analyst jumped on the
bandwagon. Citigroup, Oppenheimer and Bank of America reiterated support on
issue and all raised price targets substantially. Bank of America topped all
Wall Street estimates with its price target projection of $872.00.
The herd
mentality pushed Intercept shares to nearly $500, reaching $497 before profit taking ensued and nearly erased of the
prior two days of gains in the next two trading sessions. After stabilizing at
the $250 level, the issue has rallied in much more orderly fashion to its
current level of $360.
Its future
price direction will most likely be determined by future revelations from the
company about upcoming results of its drug trials.
Next on the
list, posting a 160 percent gain, rallying from $42.01 to its current price of
$108.28 is Furiex Pharmaceuticals (NASDAQ: FURX).
Once again,
it was the announcement of top-line results indicating that the company’s two
pivotal Phase III clinical trials evaluating the efficacy and safety of
Eluxadloine in the treatment of diarrhea predominant irritable bowel syndrome
(BS-d) had met their primary endpoints provided the catalyst.
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After the
news release on February 4, Furiex leaped from its previous day close ($45.97)
to ($105.69). Without additional banter from Wall Street analysts, the issue
has been unable to match its all-time high ($121.97), but has maintained all of
its gain following its announcement. Since its massive price increase, only
Ladenburg Thalmann has commented on the issue, maintaining their buy rating and
raising their price target from $57 to $137.
Perhaps the
Street is taking a more and “wait and see” approach with this issue as it’s due
to release Q4 earnings on March 11. With their new drug not yet on the market,
the company may need to produce solid earnings from its current stable of drugs
to keep the upward momentum going.
NewLink Genetics (NASDAQ: NLNK) rounds out the top three. After
ending 2013 at $22.01, the issue has jumped 90 percent to $41.50,
While the
two aforementioned issues spiked higher after favorable news release, NewLink
has been on steady march.
The company,
which is developing immunotherapies that unleash the innate strength of the
human body to fight cancer, has focused on both immune stimulation as well as
blocking tumor immune suppression for patients treatment success.
Their
pipeline includes HyperAcute immunotherapies that stimulate the immune system
to target and destroy cancer cells as well as pathway inhibitors that suppress
the mechanisms by which tumors evade immune-mediated destruction.
Other
HyperAcute candidates are being studied in drug trials in pancreatic cancer and
non-small cell lung cancer.
Stifel
Nicolaus has been the only Wall Street firm to comment on the issue as of late.
On January 22, the firm maintained their buy rating and raised their price
target from $31 to $53.
With the
ever-increasing number of people being stricken with some form of cancer, it is
not hard to understand the enthusiasm for an issue attempting to produce new
treatments.
So far,
these three issues have been your top gainers for 2014. For investors already
in these issues or looking to invest in
them, pay close to attention to further trial or development announcements as
they will likely determine their future price movement.
Read more
Benzinga.com small-cap articles: http://www.benzinga.com/news/small-cap
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