Human Genome Sciences (HGSI) and Dendreon (DNDN) Are Excellent Buys Now
The biotech companies to watch now are those that are on the cutting-edge of innovation, research and developing treatments for everything from swine flu to cancer. Two companies that fall into that category are Human Genome Sciences (HGSI) and Dendreon Corp. (DNDN).
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Human Genome Sciences (HGSI) surged last week after news of HGSI's late-stage clinical trials for its lupus drug showed good results. With no new treatments having been approved for lupus in decades, the analyst community seems to have bestowed HGSI's drug, Benlysta, with almost instant blockbuster status.
If the drug is approved, Benlysta could be on the market in late 2010. This latest development is a huge deal, as it would give HGSI's top-line growth a much needed boost. The company partnered with pharmaceutical behemoth GlaxoSmithKline (GSK) to cover the testing expenses, and HGSI will receive a substantial share of profits from this drug, thanks to the collaboration with GlaxoSmithKline. It's been over 50 years since a lupus drug has been approved, and the revenue potential for this kind of medication is enormous.
Shares of HGSI rallied almost 50% in the two days following the news, which indicates to me there's a lot of buying pressure supporting this stock. Get in now before a spike in volume drives Human Genome Sciences even higher.
I recently upgraded HGSI to a strong buy in my proprietary stock rating system, after the biotech company reported a narrower loss in the third quarter. That means now is the time to get into this stock!
My second biotech pick is Dendreon Corp. (DNDN) is a biotech stock that researches and develops pharmaceuticals and therapeutics to give patients living with cancer more treatment options.
The company's main product is Provenge, a vaccine for the treatment of prostate cancer. In fact, DNDN just submitted this drug candidate to the Food and Drug Administration for approval, and things are looking up. If the therapy is licensed by the FDA, not only would it make Provenge the first treatment of its kind available in the U.S., it would also provide a financial windfall to Dendreon.
Speaking of windfalls, DNDN reports earnings on Nov. 11. The analyst community is expecting a loss of 19 cents a share for the quarter. If the Provenge treatment is approved, DNDN's fundamentals will firm up going forward. Right now, the stock is benefiting from a surge in buying pressure in anticipation of earnings, which is helping to drive shares higher. But if DNDN reports a wider-than-expected profit, things could really take off.
Dendreon's fundamentals are very strong right now, and I anticipate nice profits from DNDN in the next few months.
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