Many biotech stocks performed dismally in 2016 awaiting to see if they will redeem themselves this year as product launches, acquisitions, and clinical updates take center stage. Some of the stocks to watch out in the first quarter as big catalysts swings include Cidara Therapeutics Inc (NASDAQ:CDTX) ArQule, Inc. (NASDAQ:ARQL), Cempra Inc (NASDAQ:CEMP) Nivalis Therapeutics Inc (NASDAQ:NVLS) Synergy Pharmaceuticals Inc (NASDAQ:SGYP), Merrimack Pharmaceuticals Inc (NASDAQ:MACK) OPK NVTA and Unique NV (NASDAQ:QURE).
A biotech company that tops our list is OncBioMune Pharmaceuticals Inc (OTCMKTS:OBMP). OBMP is currently working on an vaccine for prostate cancer and from the recent press releases it seems that 2017 could be a huge year for this undervalued and undiscovered biotech stock. Read more HERE
Backed by a cash balance of $116 million Cidara Therapeutics is a must-watch catalyst swing, in the first quarter, given the number of big announcements on dial. The biotech company has already completed patient enrollment in Phase 2 trial for its novel treatment for acute fungal infection. The fact that 97,000 Americans die from hospital-related fungal infections means there is a ready market for the drug, which should shore up the stock’s sentiments among investors.
Under the able leadership of Jeffrey Stein, the company could trade higher on the back of impressive Q3 results. For this trade, entry at $10 a share should offer good risk reward on target to highs of $12 a share.
ArQule is set to unleash Phase 3 data on its candidate drug Tivanitib that addresses inoperable Hepatocellular Carcinoma cancer. While the data might be disappointing, to say the least, a run to highs of $1.40-$1.50 looks likely. This trade should be carried out with caution with stops at around $1.20 a share.
Ramping up support that the stock could trade higher is an increase in activity of world’s largest hedge funds with stakes in the company. Among the big hedge fund with stakes in the company, include Nantahala Capital management and Biotechnology Value Fund
Cempra Inc is still trying to pick itself from two FDA setbacks that saw it ordered to run a 9,000 patient safety trial. While the same could take some time and money, implied volatility in the options market suggests investors have not lost touch with the stock. Phase 3 data for its TAKSTA treatment as well as Phase 3 data on Solithromycin for gonorrhea are some of the catalysts that could set the pace for the stocks movement. Above $2.50, the stock could soar to highs of $5 a share on the positive news. Morgan Stanley analyst, Andrew Berens has already upgraded the stock on belief it is a bargain given that it is trading below its net cash of $3.80 a share. The same should point to a potential upside run especially on receiving interest from value-oriented investors.
Nivalis Therapeutics is trying to pick itself after its lead compound disappointed in clinical trials, fueling a $50% plunge of the stock in the market. The company has resorted to cutbacks as it also pursues new strategic alternatives as it looks to reinvigorate its growth prospects.
Some of the strategic alternatives that the company is exploring include acquisitions, mergers, business combination, and strategic transactions involving the company. Given the selloff, the stock could bounce from the current lows on the release of a different Phase 2 trial for cystic fibrosis seen as an important catalyst to push the stock to highs of $2.90 a share.
Synergy Pharmaceutical is another must watch catalysts play for the first quarter given the two major catalysts in play in the quarter. The company is awaiting an FDA verdict on its drug for Plecanatide for chronic idiopathic constipation, later in the month. If approved the drug the drug will become the biotech’s first commercialized product thus affirming its catalyst credentials.
The fact that over 40 million endure chronic constipation means the company could be in for a big paycheck even before venturing into the global scene. Sales from the drug could rise from $35 million to highs of $480 million as of 2020.
The company is also set to file a new drug application for Plecanatide for irritable bowel syndrome. Positive news in the quarter could push the stock above the $6 a share trading mark.
Merrimack Pharmaceuticals just like other biotech companies has a chance to redeem itself this quarter having underperformed last year especially on terminating a breast cancer treatment. With only one marketed product under its name, the company needs to come up with new drugs if it is to avoid a further plunge in the market given that its cash in hand is quickly disappearing.
UniQure has picked itself nicely after a minor pull back below the $6 a share trading range even on producing positive data at the ASH conference. The biotech company has embarked on a restructuring push as it looks to consolidate in the drug pipeline. The company is to shed 50-60 jobs in its research and development group as it hopes the same will save more than $6 million. Drug consolidation should save the company up to $16.1 million that should help it pursue projects with high potential.
With the stock trading above the $6 a share mark, it could trade higher given the catalysts at hand. The company is set to announce Phase ½ data for Sanfilippo B in the first quarter. Ahead of the data release, the stock could trade at highs of $7 a share.