Squawkbox: On The Radar 07-11-08
Squawkbox market analysis with Danielle Morellino from Thomson Reuters
Transcript:
Welcome to this week’s Thomson Squawk Box On the Radar Report.
With the marketing falling on hard times, the sector in which smart money hedge funds are increasingly seeking buying opportunities is biotech.
The Thomson Squawk Box team tracks hundreds of regulatory filings daily. Among the smart money players we track, many recently have been disclosing new stakes and increased stakes in stocks in the biotech sector. Among the most recent was SAC Capital’s disclosure on July 3 that it either took new stakes or raised positions in Barrier Therapeutics, Inspire Pharma and Akorn Inc.
Also of note, Fresenius this week announced a buyout offer for APP Pharmaceuticals for a 30% premium that may develop into a 60% premium pending the outcome of a drug candidate.
Here at TSB, we are watching several additional biotech plays for potential upside.
One stock on our list is OSI Pharmaceuticals. It has multiple data releases expected in the second half of 2008 that can be major catalysts to send this stock higher. Tarceva, used for treatment of non-small cell lung cancer, has shown indications to potentially become the leading drug in this area, and has a huge market opportunity. The company also has BETA and SATURN in the works that could also become big players in oncology. Management has shown the ability to be cost effective and 2008 and 2009 look to be cash cow years for the company.
Elan Pharmaceuticals is another. With recent positive data from its Alzheimers drug the stock has soared higher, but there is still untapped potential. On July 29 at the Intl Conference on Alzheimers, the company will present data from phase 2 studies. Alzheimers is the largest potential market for biotech stocks, and if we see positive data this stock can go much higher. It also is partnered with Biogen for TYSABRI, a drug for Multiple Sclerosis, which has recently come under pressure at the FDA, but is still a leading drug in the market for this disease.
For more biotech names and for more detailed information, visit Thomson Squawk Box Dot Com.
Duration : 0:2:19
