Where the heck are the profit-takers in these pesky biotechs?
Did you see any of them in yesterday's session? I know I sure didn't. Could there be hope we could see some today off the Fed, one that could give you a chance to get into some Biogen Idec (BIIB) before the unveiling of results Friday of its anti-Alzheimer's formulation? That's your best hope.
But if yesterday's trading is a prologue, it just might not be because we are in one of the most prolonged, non-register-ringing moments I can recall.
Take the action in the stock that's really breaking out here: Regeneron (REGN), a company known for its macular degeneration drugs, but is now rapidly moving into anti-cholesterol formulations. In the old days, pre-2015, every time this stock would gain more than 10 points people would go nuts selling the darned thing, ringing the register. Now, after the anti-cholesterol results we saw at the cardiology conference last weekend, coupled with the positive New England Journal of Medicine piece, Regeneron's stock has been a straight shot up to $467 from $426. That's truly an impressive feat with nary a seller.
Or how about Esperion (ESPR), a company that I can't blame for cancelling coming on "Mad Money" when they decided to raise money in a secondary after an anti-cholesterol pill showed some positive results. It had to strike while the iron was hot because there clearly wasn't enough stock around to sate the buyers. It was almost as if mutual funds wanted to mount a takeover of the darned thing.
Now that's a parabolic move, one that I get because while Esperion's formulation is way behind Regeneron's or Amgen's (AMGN), it DOESN'T require an injection and can be taken in pill form. That's going to be huge no matter what, as going to the doctor every other week for an injection is not acceptable if a pill can come near the same results, which certainly appears to be the case right now. Still, it is amazing that it took rumors of a secondary to stop this stock from rallying more than it did.
(Check out the chart work from my colleague Tim Collins, who says that while he'd "hesitate chasing, but (doesn't) see a valid reason to short it. If anything, be patient in your bullishness...")
I am grateful to the company for cancelling an appearance on "Mad Money" when they decided to do the deal because if they were on and THEN announced an offering, it could have really hurt the viewers. No matter, I bet the deal is snapped up in a nanosecond.
Then how about BioMarin (BMRN)? Here's a company that did an 8.5-million-share secondary at $93.25 back on Jan. 22. That secondary, the so-called smart money told me, would be the death knell in the stock because there were so many short-sellers in the name who had been bidding the stock up in a frantic attempt to bring in their shorts.
The stock closed at $127 today, up almost $3. Wouldn't you think that you would see a lot of supply from that secondary? The thing is tight as a drum. Same with Receptos (RCPT), which has an important immune disorder franchise that's got a bead on ulcerative colitis, among other illnesses. This stock's up in a straight line.
Or how about GW Pharma (GWPH). Here's a cannabinoid stock that's up 48% for the year on nothing, no news at all, other than vague rumors that there might be a groundswell in Congress for federal approval of its pain-killing formulations. I don't know at this point I would take some profits, but I think I am the only one who feels that way. It's been a big win and you sure don't want to give back the gains in this super-volatile stock. It's tempting to declare victory and go home.
Finally there is Isis Pharma (ISIS). Not that long ago there was a lot of chatter about how one of its myriad formulations wasn't that strong. It looked like it was down for the count. Nope, it just keeps on climbing.
Part of this is the fact that the Pharmacyclics deal was at such a high price and had so many buyers that the shorts are giving up. Part of it, though, is that these companies are meeting multi-billion unmet needs, making them desirable on their own right.
Just a remarkable and way¿too-unheralded run for all of them.