Biotech stocks are rolling once again in the wake of another round of good news. Among today's leaders are GenVec, Inc. (NASDAQ:GNVC), Oncothyreon Inc. (NASDAQ:ONTY), AVI BioPharma, Inc. (NASDAQ:AVII), and SciClone Pharmaceuticals, Inc. (NASDAQ:SCLN). Here's a closer look at each one, and how you may want to play it.
GenVec, Inc. (
GNVC 0.849 +10.3%) shares jumped sharply on news that the company will further jointly develop a malaria vaccine as part of the PATH Malaria Vaccine Initiative. The contract is estimated to be worth $2 million, and is intended to perform preclinical feasibility studies.
The amount may seem minor (and it is), but considering GenVec only did 15.2 million in revenue last year, an extra $2 million is a decent bump.
As for the stock, GNVC was an interesting long-term idea with or without today's announcement. GenVec made a nice technical bottom early in the year, and has been trending higher since. A long-term ceiling line has been broken as well.
Oncothyreon Inc. (
ONTY 4.43 +11.8%) is up firmly today as well, though on no news whatsoever.
Like GenVec, ONTY's technical chart is pretty compelling.... a long-term ceiling line was broken, and we've seen better volume and persistent follow-through to the upside. In the short-run though, it's very overbought.
The source of the strength stems from the company's presentations at this year's ASCO conference in late May. Cancer treatments - cancer vaccines in particular - were all the rage following the event, and Oncothyreon was along for the ride. It was still well-deserved though... all three drugs the company featured work pretty well at their current phase in development.
More recently, the company's breast cancer drug Stimuvax went into Phase III testing.
AVI BioPharma, Inc. (
AVII 2.12 +11.0%) is yet another overbought biotech stock. The company's still moving from its addition to the Russell 3000 Index and the H1N1 swine flu treatment contract with the Department of Defense. The contract was worth up to $5.1 million, which isn't bad for a company that did $21.2 million in sales last year.
Also, AVI's Seracare HPV genotype performance panel has been determined to be able to distinguish between HPV16 and HPV18, meaning the technology can diagnose up to 70% of cervical cancers.
The stock's story is the same as the rest...a compelling long-term opportunity but a scary price in the short run.
SciClone Pharmaceuticals, Inc. (
SCLN 3.91 +9.2%) actually had news recently - its Q2 earnings call will be held on August 4th. Though no hints were dropped about what to expect, the market clearly seems enthusiastic about what it's going to hear.
A quick glance at SciClone's chart would send many traders the other way...running. However, on a valuation basis, the chart may be perfectly tolerable.
Though the company's phase II clinical trial for RP101 (to treat patients with late-stage pancreatic cancer) is still years way from any approval, what's been obscured from all directions is that SciClone has been profitable in 2 of the last 3 quarters, and expects to be profitable for the year. The August 4th conference call could open other investor's eyes to that fact.
The earnings will mostly come from its top product, Zadaxin. It's sold in 30 geographical markets as a treatment hepatitis B and C viruses, plus certain cancers. The FDA has not approved it as a hepatitis C treatment yet.
SciClone also has a treatment for melanoma in the near-term pipeline.
