There are exceptions to this rule.
Imclone (IMCL) had good news in mid March which ran the stock from about 10 to 16. IMCL pulled back all the way to 12, and then started a run that is still continuing. There has been virtually zero news in about a month, yet the stock closed today at a very respectable 17 9/16, which isn't that far from the "peak" at around 20. IMCL has a nice product pipe, but the drugs that are currently in Phase 3 are, quite frankly, less impressive than Theratope, and will initially have a smaller market.
The interesting fact is that IMCL didn't have any "earth shattering" news. I believe it was a cumulative effect, starting with a wonderful writeup that showed the potential market value of the phase 3 product (virtually identical to Theratope). Then they got a 5 million dollar milestone - nice, but not a biggie. Then a broker upgrade, which seemed to legitimize this small biotech and lift it out of relative obscurity.
Entremed is another interesting example. A few excellent mouse studies, but nobody cared. Then a big NY Times article, and the stock went from $10 to $85. While it did sell off the pop down to around $20, it has since traded as high as $35. Way off the highs, but no where near it's original $10 level, even though they have yet to test anything on a human.
My personal theory is that IMCL did best holding it's gains because of strong broker support coupled with late stage clinical trials. If Biomira recieved some high profile media coverage, and it was followed up with broker analysis and coverage, BIOM could easily trade in a $8-15 range (they got twice the float of IMCL), even after an initial "pop" into the high teens or 20's. There is simply no reason why BIOM couldn't share the same market cap as IMCL. Granted, they don't have an early stage anti-angiogenesis project like IMCL, but I think the BLP-26/16 super vaccine is comparable - actually performing better in pre-clinical trials than anything IMCL has in it's pipe - and it's been tested on humans and is approved to move into Phase II.
All clinical confirmations, media coverage, and brokerage coverages takes Biomira one step further from from a "high-risk-speculative" play, to a moderately risky play with very high potential gains in a relatively short timeframe. This change in perception could easily double the market cap overnight.
Everyone also keeps assuming there will be no news for 18 months. Not at all true. Biomira is planning on a Phase I lipo vaccine with Biovector that could be announced any day now. BLP-25 could start Phase II trials this summer, and we could also hear of a major corporate partner for BLP-25 at any time. IL-2 could be licensed at any moment for AIDS and/or Cancer related research. I would also expect to see a significant milestone payment from Chiron as any time - these usually occur long before completion of Phase 3 - my guess is at full phase 3 enrollment. Not to mention various and unexpected articles, updates, conferences, and scientific publications.
Sorry about the long message...heh.
SM |
