A gain of 25%... 50%... even more than 100% in a single trading
It's rare. But it does happen.
Dendreon Corp. (Nasdaq: DNDN)
, for example. Dendreon has a new drug called Provenge that taps
into the immune system to fight prostate cancer. A single course of
treatment costs $93,000.
You read that correctly. It's $93,000 for just one cycle of one
drug. Between March 2009 and April 2010 -- during which Provenge
was going through late rounds of trials -- Dendreon'sshares rose
On just one day -- April 14, 2009 -- Dendreon's stock shot up 132%.
And it almost doubled again two weeks later on April 29, 2009, when
made another one-day jump of 94%.
Shares of biotechnology company
Clinical Data (Nasdaq: CLDA)
rose 68% on January 24, 2011, following news the Food and Drug
Administration (FDA) approved its antidepressant drug.
And then there's
XenoPort (Nasdaq: XNPT)
, whose shares soared 56% on April 7 of this year, after the
biopharmaceutical company got the nod from the FDA for its
treatment of restless leg syndrome.
It's easy to see that when major medical breakthroughs occur, the
benefit can be two-fold -- not only do patients get help for
life-altering illnesses, but investors can also earn overnight
And I don't know if there is anywhere the opportunity is more
pronounced than in the field of treating cancer.
The American Cancer Society estimates that one in two American men
and one in four American women will be diagnosed with some sort of
cancer in their lifetimes. More than 500,000 Americans will succumb
to the disease this year alone, equal to roughly one-third of the
1.5 million new cases expected to be diagnosed in 2011.
But it wasn't that long ago that a diagnosis of cancer was an
automatic death sentence, and a terribly painful one at that. Now,
a generation later, many types of cancer are curable and others are
manageable. New drugs and treatments will take cancer from a killer
disease to a chronic condition within my lifetime.
This means there will be companies along the way that
from creating the drugs that beat cancer.
This is all well and good, but what's the best way for the average
investor to find the next quick gainer that will soar from the
fight against cancer?
First, forget the household names. It may well be the case that the
next miracle drug will come from
Abbott Labs (
Eli Lilly (
-- and more power to them.
But from an investing standpoint, we have to respect the law of
large numbers. That is, a blockbuster drug matters a lot more to
the share price of a $500 million company than a $50 billion
The challenge for investors, then, is knowing where to look for
small companies with promise, and what to look for.
I've been doing a lot research into this area. I've found a total
of 39 companies with cancer drugs in phase III of trials -- this is
the step before FDA approval. When a drug passes phase III trials,
it is given a pretty good chance (80%) of being approved by the
FDA. It was Provenge's passage of phase III trials that started
Now, investors must go into this situation with their eyes fully
open. There are never any guarantees in the field of drug approval
(many stocks have dropped sharply on news a drug wasn't approved).
But for the better part of a month I've been digging through the
list of cancer drugs currently in phase III trials. And I think a
handful of the companies are showing promise.
This means they are small companies with big potential for FDA
approval, and they're working on products that target large
segments of national health care spending.
This list includes some big names, including Pfizer,
Amgen (Nasdaq: AMGN)
Bristol-Myers Squibb (
. But mixed in are smaller names like
Halozyme Therapeutics (Nasdaq: HALO)
. This $700 million biopharma company has two cancer drugs in
late-stage trials, one for breast cancer and the other for
Action to Take -->
If one of these drugs is approved, a big one-day jump in the shares
isn't out of the question.
And if we're able to make money while also battling against one of
nature's most vile diseases, I can't see a negative.
As I said, for the better part of a month I've researched the
companies that could be the next big winners in the treatment of
cancer for my
advisory. To learn more about my results -- including the 5 stocks
I think show the most promise -- visit this link.
Disclosure: Neither Andy Obermueller nor StreetAuthority, LLC
hold positions in any securities mentioned in this article.