How Close Are These Biotechs to Breakouts? DARA, ZGNX, ANTH in Focus.
Though the market may not have much bullishness left to give right now, a handful of biotech stocks look like they're just now starting to get some traction. Among them are Zogenix, Inc. (NASDAQ:ZGNX), Anthera Pharmaceuticals Inc. (NASDAQ:ANTH), and DARA Biosciences Inc. (NASDAQ:DARA). Here's a closer look at all three, what's driving them, and what it will take to seal the deals. 
The last year hasn't been an easy one for Anthera Pharmaceuticals Inc. We've seen the stock make two big bearish gaps, and offer little to no hope since either.... except for perhaps today. As of today, ANTH shares are moving up firmly, but not excessively. Volume is strong, but not so strong that there's no hope of avoiding a wave of profit-taking. Speculators can (relatively) safely wade in now.
ANTH is a biotech stock that's something of a one-trick pony; it's a good thing that pony is compelling. Its Lupus drug has recently wrapped up Phase 2 trials, and is ready to request FDA permission to advance to Phase 3. And, if the efficacy measures so far re any indication, then Anthera Pharmaceuticals shares may continue to be rewarded here. The drug's resulting improvement scored double-digit (percentage) improvements compared to the placebo.
With just a quick glance at the chart, it looks like DARA Biosciences Inc. shares have already peaked and are on the way down again. They bumped into the 200-day moving average line today after last week's big runup, but are already back in the red this morning. It's still too soon to say DARA shares are going to get back in a familiar bearish groove here, however, as the peel-back from the 200-day line is exactly where you'd expect to see some hesitation. Notice that the dip today isn't a high-volume move. That's not to say the stock can't or won't go any lower. It is to say, however, that there's more bigger-picture bullishness unfurling here than potential bearishness. Traders just need to wait for the move above the 200-day moving average line.
DARA primarily manufactures and develops treatments for various forms of cancer. Its Soltamox, for breast cancer, will launch later this year, while Bionext later this year as well. Gemcitabine - which will treat several cancers - is in Phase 3 testing for several indications right now, while KRN500 for chemo-inducted neuropathic pain is in Phase 2 testing. Last week's surge was the result of the company buying rights to a new treatment (of oral mucositis), but there's more going on here than just that.
Last but not least, Zogenix, Inc. has quietly - almost imperceptibly - wiggled its way out of a downtrend and into an uptrend. Perceptible or not though, it's over the hump. As of today, ZGNX has cleared a falling resistance line... in the shadow of bullish crosses of all its key moving averages. Just take the whole thing as a clue of a major U-turn.
ZGNX is primarily a developer of pain-killers and related central-nervous-system disorder therapies. It's already got a migraine treatment on the market, and should have a new dosing/delivery version of the same drug on the market next year. Zogenix is also waiting to hear back from the FDA about its May submission of an NDA for its ER hydrocodone (for chronic pain) capsules... which is most likely what's spurring the recent strength. There's still room to roll here though. 
James E. Brumley is a paid contributor of the SmallCap Network. James E. Brumley's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.
Do NOT buy or sell ANTH, ZGNX or DARA until you have read everything.
SmallCap Network provides comprehensive research and opinions on ANTH, ZGNX and DARA. |
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| Date: | June 19, 2013 | |
| Price: | Free | |
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