The month of May has thus far been a very profitable one for investors in a number of small cap biotechs leading up to the June 2011 ASCO meeting, particularly ones that haven’t consequently fared too well once their respective binary events had met its endpoints.
First up on the list is Oxigene, Inc. (NASDAQ:OXGN), whom has experienced nothing short of a meteoric rise from the $1.5 price per share level to the now $5.24 in a matter of three weeks following our report discussing their nearing of marketing approval of the first anaplastic thyroid cancer drug. While early technical analysis showed clear evidence of the oversold and undervalued condition, the stock has now begun trading at 10 times average volume in each of the past few days during this run, which often signals that a few hedge funds and institutions have begun to take a controlling stake in its low float, which sources list at 5.61 million.
While some argue that this could be due to a potential hostile takeover attempt, this is highly unlikely, and more so a elaborate scheme to control the price of the shares to their liking. More worrisome is the fact that fundamentals or significant changes to the outlook for the cancer drugs in its pipeline have nothing to do with the recent momentum, according to an analyst at TheStreet. Investors are looking forward to the ASCO meeting which will provide updates for two studies in the company’s flagship product, Zybrestat. Last September, researchers stated the company’s drug (FACT study) had a median overall survival of 5.1 months compared to 4.1 months in ATC patients, one which was not statistically significant by any means. This caused a spike in the share price from $5 to $8 in just a few hours which, in the end, resulted in a move back down and erasing all of the gains posted during that trading session.
No comments:
Post a Comment