as part of our
While catalyst trading small-cap biopharmas can be risky, if
done with the correct discipline and closely following the chart
technicals, they can be very rewarding. A few of my recent catalyst
trade picks have done very well as of late. Let's take a look.
on January 15th of this year when the stock was trading in the
$2.80 range. The stock recently hit a high of $4.85 on January
31st, so this was a very successful catalyst trade pick.
Another recent successful pick of mine has been
EDAP TMS SA (
, which I first mentioned in a catalyst trade pick list on January
3rd, when the stock was trading around $2.10 a share - the stock
currently trades near $3.60.
However, in the same list article, I mentioned
which was trading around $2.90 a share before reporting bad Phase
III data, causing the stock to sell off to near $2.50 a share. We
can see from these examples that the rewards these catalyst trades
offer can be very good, and subsequently, the potential punishment
for mis-trading them can also be very significant.
In this short write-up, I would like to focus on small cap
companies I feel offer good upside catalyst trade potential.
ImmunoCellular Therapeutics (
The company is currently conducting a Phase II trial of ICT-107,
which is a study in patients with newly diagnosed glioblastoma.
Immuno expects to report interim safety analysis data which is
anticipated in the first quarter of 2013. Afterwards, the company
expects the final safety and efficacy results late in the second
half of 2013.
According to John. S. Yu, MD, ImmunoCellular's Interim Chief
We believe that ICT-107 represents the next generation of
cancer immunotherapy by targeting both tumor cells and cancer
stem cells with a dendritic cell-based vaccine. We deeply
appreciate the oncology community's enthusiasm for the ICT-107
clinical program and their shared interest in exploring the
therapeutic potential of this potentially breakthrough
technology, as reflected in the pace of enrollment in the trial.
I congratulate the ImmunoCellular clinical team for this
successful milestone in efficiently and rapidly completing
enrollment in this complex clinical trial.
Dr. John Boockvar, director of the Brain Tumor Research Group,
associate professor of neurological surgery at Weill Cornell
Medical College and a neurosurgeon at NewYork-Presbyterian
Hospital/Weill Cornell Medical Center remarked:
This potential vaccine tested in patients with Stage IV
glioblastoma is designed to leverage the patient's own immune
system after surgery and chemo-radiation treatments to hunt and
destroy remaining brain tumor cancer cells - one of the clinical
trial testing sites for the experimental vaccine. Previous Phase
I study results show the vaccine may improve patient survival by
enabling them to remain disease-free longer when the vaccine is
combined with standard treatments. I look forward to seeing the
Phase II results.
(click to enlarge)
The relative Strength Index (RSI) has turned very bullish here.
The Moving Average Convergence/Divergence has as well turned
bullish. It appears to me that Immuno is close to breaking out, and
additional buy-side volume could take the stock to near the $2.65
level soon, if not higher to $2.80. In yesterday's trading session,
the stock filled the gap we see above, which was around $2.40. With
the company's near term catalyst shortly approaching, I think
Immuno offers nice upside potential.
Immune therapy could end up being the next standard in terms of
cancer treatment, so Immuno is definitely one company to keep a
close eye on.
Sarepta Therapeutics (
Everyone has been watching Sarepta very closely ever since the
company reported promising data late last year for its drug
Eteplirsen, which is in Phase II clinical stage for the treatment
of Duchenne Muscular Dystrophy (DMD), which caused the stock to
massively rally from around $14 a share to a parabolic price of $45
in one trading session.
The company is hoping to gain accelerated approval for the drug
by the FDA this year. According to the well-known biotech writer
It's reasonable to assume FDA will convene an advisory panel
to review eteplirsen if the agency allows Sarepta to file for
accelerated approval. I'd say a panel is a near certainty, given
the novel exon-skipping mechanism of Eteplirsen and the lingering
controversy over the small number of Duchenne muscular dystrophy
patients with the drug to date.
I don't see an Eteplirsen advisory panel as a negative. In
fact, I'd wager that a panel would bolster the drug's chances of
being approved early. The convincing efficacy and safety data
generated already, coupled with powerful patient testimony, would
make it extremely difficult for any expert sitting on the panel
to vote against eteplirsen.
I say, bring on FDA panel. It's a positive for Sarepta.
I'd have to agree with Adam here on Sarepta, and I believe an
advisory panel might happen sooner than later for Eteplirsen.
Adam is often-times known for being a bear on many small-cap
biotechs, so when he is bullish on one of them, he is usually
The main thing I notice above is the up-trending RSI and MACD,
yet the stock seems relatively flat. This could be the beginning
signs for yet another run for Sarepta, which I think could touch
the $30 price range soon.
Possessing a treatment for DMD that ultimately proves itself to
be successful might constitute a huge break-through medicine. I
expect the stock price to continue to head up in anticipation of an
advisory panel convening soon here.
Navidea Biopharmaceuticals (
Navidea expects an approval decision from the FDA in April of
this year regarding its Phase III drug Lymoseek in regards to
marketing Lymphoseek for use in Intraoperative Lymphatic Mapping
According to the company, Lymphoseek is:
… a radiopharmaceutical agent being developed for use in
external lymph node imaging and intra-operative lymphatic
mapping. Lymphoseek has been evaluated in well controlled Phase
III clinical trails in patients with breast cancer and
(click to enlarge)
Above, we see the RSI beginning to trend bullish again, along
with a nice flag pennant pattern forming. More often times than
not, this is healthy for a stock that just made a nice leg up into
a new trading range. Notice the reluctance to sell after the leg up
into the new trading range. I take this as a sign that the stock
will continue to trend higher over the next few weeks. I think a
short term move to at least $3.50 is on the horizon.
I believe Lymphoseek has a very good chance at gaining FDA
approval. The greater question is just how valuable the asset is.
The market might not be huge for the drug, but nonetheless, I do
expect a nice upside trend to continue into April.
Disclaimer: This article is intended for informational and
entertainment use only, and should not be construed as professional
investment advice. They are my opinions only. Trading stocks is
risky - always be sure to know and understand your risk tolerance.
You can incur substantial financial losses in any trade or
investment. Always do your own due diligence before buying and
selling any stock, and/or consult with a licensed financial