You have to admire how this market is suddenly giving companies the benefit of the doubt.
Tonight I had on Esperion Therapeutics (ESPR), which has a pill formulation that could reduce so-called bad cholesterol at the same rate as Regeneron (REGN) and Amgen (AMGN), which do it by self-injection. Clearly, a pill form is preferred, but this company is very far from being able to come to market with the drug. Still, it was able to raise $150 million overnight on the strength of the Phase 2 results, and everyone who got in on the 1.75 million shares priced at $100 was up 10 bucks by the end of the day. That's just raw demand, no doubt because people want to be in before the company is acquired or a major stake is taken by old pharma.
Then after the bell, Prothena (PRTA), a biotech, released some results from a Phase 1 study that shows some promising results against Parkinson's, where there really isn't much that's helpful. It rallied more than 25%. On Phase 1 results, mind you.
Similarly, I know it is a broken record, but I don't have many records broken like Biogen-Idec (BIIB), which, if it doesn't go down tomorrow when we get the Alzheimer's trial results, then I have to admit that the majority of what I know about trading is going out the window. Again, that's because the market is saying, "We have been too skeptical about the future when it comes to biotechs."
Again, I come back to the fact that there two other bidders for Pharmacyclics (PCYC), which, ultimately was bought by AbbVie (ABBV) -- which itself is starting to climb -- and people think these bidders are going to strike any minute.
And, of course, stalwarts Celgene (CELG), ISIS Pharma (ISIS) and Regeneron hit all-time highs, as they just keep going up on the same information.
We periodically have had these bouts of total skepticism suspension and they go on until finally one company either reports something very disappointing or there's a generic challenge to a key drug.
You have to believe, given the hype around the Biogen Alzheimer's drug, there has to be a possibility for disappointment, but it sure hasn't worked out that way this time around.
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