Hepatitis-C Can Be Great For Biotech Investors (Plus One More Hot Biotech Stock): IDIX, ARRY & FOLD

On Friday, biotech stocks Idenix Pharmaceuticals (NASDAQ: IDIX), Array BioPharma (NASDAQ: ARRY) and Amicus Therapeutics (NASDAQ: FOLD) were hot. Specifically and in the wake of a recent acquisition in the Hepatitis-C space, Idenix Pharmaceuticals (IDIX) gained 13.45% and Array BioPharma (ARRY) gained 11.74%. Meanwhile, Amicus Therapeutics (FOLD) gained another 10.35% after surging 29.71% the day before. However, “hot” biotech stocks have a way of quickly throwing cold water on investors at the first sign of an FDA rejection or a failed drug trial while takeover rumors may remain just that. Hence, can investors and traders alike ride Idenix Pharmaceuticals (IDIX), Array BioPharma (ARRY) and Amicus Therapeutics (FOLD) to even higher levels or should they just give all three a past? Here is a closer look to help you decide for yourself:

Idenix Pharmaceuticals (NASDAQ: IDIX)

Idenix Pharmaceuticals is a biopharmaceutical company engaged in the discovery and development of drugs for the treatment of human viral diseases with operations in the USA and Europe. On Friday, Idenix Pharmaceuticals rose 13.45% to $14.42 (IDIX has a 52 week trading range of $2.67 to $14.86 a share) for a market cap of $1.39 billion. In fact, Idenix Pharmaceuticals ended last week 100% higher thanks to takeover rumors sparked by the fact that the company has a potentially huge hepatitis-C treatment while the patents at many big pharma companies have expired or are about to expire. Moreover and last week, Bristol Myers Squibb (NYSE: BMY) announced that it would acquire Inhibitex (NASDAQ: INHX) – another biotech stock in the hepatitis-C space. Of course and once again, takeover rumors are just that until a deal is actually signed but Idenix Pharmaceuticals did announce at the end of the week that they are seeking a partner for their experimental hepatitis C drug in order to create a combination treatment. Hence and if you don’t already own Idenix Pharmaceuticals , it might not be too late to join the party existing investors are enjoying.

Array BioPharma (NASDAQ: ARRY)

Array BioPharma is a biopharmaceutical company focused on the discovery, development and commercialization of small molecule drugs to treat patients afflicted with cancer and inflammatory diseases. On Friday, Array BioPharma rose 11.74% to $2.38 (ARRY has a 52 week trading range of $1.58 to $3.41 a share) for a market cap of $139 million. Apparently, some bloggers have noticed that Array BioPharma also has an oral formulation for the treatment of chronic hepatitis C in Phase II clinical trials – meaning there could be some takeover speculation in play. However and at the start of this week, it was reported that Robert E. Conway, Array BioPharma’s CEO and a Director, had resigned for personal reasons after 12 years with the company. Hence, its hard to tell what direction Array BioPharma will move when the market opens or whether the spurt on Friday was the result some investors or traders noticing the company’s drug pipeline or whether there might have been some “euphoria” about a change brewing at the top of the company.

Amicus Therapeutics (NASDAQ: FOLD)

Amicus Therapeutics is a biopharmaceutical company focused on the discovery, development and commercialization of pharmacological chaperones for the treatment of rare diseases. On Friday, Amicus Therapeutics rose 10.35% to $5.01 (FOLD has a 52 week trading range of $2.10 to $8.12 a share) for a market cap of $173.6 million. This was after Amicus Therapeutics surged 29.71% to $4.54 on Thursday. However, I am not seeing any specific company news to support this takeoff but technicians might point out that the stock hit a low point back in November and has been breaching breakout points since then. At the beginning of last week, Amicus Therapeutics announced that the company began 2012 with a cash balance of approximately $60 million plus investors should note that FOLD has reported revenues of $5,798k (most recent reporting quarter), $4,040k and $5,966k along with net losses of $9,759k (most recent reporting quarter), $12,641k and $13,350k. However, the cash balance along with anticipated Fabry program reimbursements from GSK should be sufficient to fund Amicus Therapeutics until the middle of 3Q2013 plus the company began 2012 with late stage clinical programs. Hence and for investors who have already missed out on Amicus Therapeutics’ gains this year, it may not be to late.

The Bottom Line. Traders along with investors with a long-term horizon would be wise to keep an eye on biotech stocks Idenix Pharmaceuticals (IDIX), Array BioPharma (ARRY) and Amicus Therapeutics (FOLD) this week.