The biotech sector continues to be mired in a tight trading range as we close out September, still digesting the nice gains from late in August. Individual small-cap names within the industry are still making big moves on company-specific news. If you are a shareholder of Zogenix, Inc. (ZGNX) , a name I have mentioned a few times over the years, you are closing out the week on a winning note. The company just announced that its primary drug candidate met its primary and all secondary endpoints, in a much-anticipated Phase III trial for the treatment of the rare disease, Dravet's Syndrome. The shares were up some 120% in early trading.
So what other small-cap biotech and biopharma names could move upward on upcoming catalysts? Let's take a brief look at a couple.
Flexion Therapeutics (FLXN) is a name I have talked about several times over the past few months. The stock has moved from the high teens to mid $20s since June, in anticipation of an Oct. 6 PDUFA date for its primary drug candidate, Zilretta, which is seeking approval to treat osteoarthritis in the knee. Based on trial results, approval appears very likely. I think the shares move into the high $20s, perhaps even the low $30s if the compound gets the FDA's green light, as expected.
Dynavax Technologies (DVAX) has quadrupled off its lows early in the year to just over $20 a share. The main trigger was an overwhelming Ad Comm recommendation for approval of its hepatitis B vaccine, Heplisav-B, late in July. Its PDUFA date was postponed until Nov. 10 to allow time for the company to design a post-trial marketing study to cross the last 'I' before expected approval. I think the stock trades into the mid $20s once Heplisav-B gets the FDA's official blessing.
I also expect some sort of market and distribution deal to be announced soon after approval, at least for the rights to Heplisav-B outside the United States. This would boost the rollout effort and address any funding overhang remaining on the company. Finally, shareholders can expect some mid-stage trial results from a promising oncology asset, SD-101, in Dynavax's pipeline in the first half of 2018. All in all, I think shareholders will continue to be rewarded for their patience in this name.
Finally, we have Progenics Pharmaceuticals (PGNX) . The stock gave up all of its ~120% post-election rally and fell back down to just over $5.00 a share in early August. Most of the pullback was triggered by worries that its drug candidate Azedra's approval chances were low. I don't think that is the case, although I do think management could have done a better job explaining data from key trials around this compound, which targets two very rare cancers of the adrenal gland. The company has started to do that, including at this week's health care conference hosted by Cantor Fitzgerald. The stock has started to recover as a result. I expect shares to climb back into the low teens once Azedra is approved in the first half of 2018.
That wraps up a look at a few small biotechs that I think have upside on upcoming catalysts.
