Near Term Catalysts, High Insider Ownership Makes GTx An Attractive Buy
Scott Matusow | May 08, 2013 03:59AM ET
Today, we are going to take a comprehensive look at a small cap biotech company with several near term catalysts, a strong cash position, and high insider ownership. I feel with all factors considered, this company can see very good price appreciation heading into its near term catalyst.
GTx (GTXI) specializes in developing synthetic hormones to achieve certain therapeutic effects in the body. Hormones are extremely important in controlling certain cellular and intracellular activities in our bodies and drugs that manipulate these hormones can have a very powerful effect. Many of our body's cells have specific receptors, where certain molecules with the correct stereochemistry and conformation can activate or inhibit a response. GTx develops drugs termed "nonsteroidal selective receptor modulators" that facilitate control of androgen and estrogen receptors by binding to the receptor instead of the natural hormone. These nonsteroidal selective receptor modulators (SRMs) are important because they are able to interact with the hormone receptors that usually only allow the four fused chemical ring structure of a steroid to bind, even though they do not contain the same chemical structure. This is significant because it allows GTx's drugs to control these vital hormones and stimulate their beneficial characteristics, while also minimizing the unwanted side effects of synthetic steroidal compounds.
GTx is currently in two pivotal Phase III trials, termed Power 1 and Power 2, for enobosarm (Ostarine; GTx-024), which is used for the ARRY-520 Phase II trial for asthma .
Conclusion:
GTXI should see a significant run in the next coming months, as investors anticipate date release from its Phase III trials. The company's strong cash position, heavy insider interest, and bullish chart are indicators of this. If GTx produces positive data here, investors will be significantly rewarded as the drugs associated with the data address large unmet need markets.
My short-term price target is $6.25 per share. Before data release, my target is $7, and on a good data release, I believe GXTI can reach $10 per share.
Disclosure: I am long GTXI
Disclaimer: This article is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are my opinions only. Trading stocks is risky -- always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.