Small Cap Biotechs That Could Make Big Moves This Week
Scott Matusow | Dec 10, 2012 07:56AM ET
Over the weekend, I screened through my small cap biotech list looking for potential stocks that should make nice moves to the upside this week. I used a combination of possible catalysts and chart indicators to identify a few biotechs I feel should make nice upside moves this week.
Star Scientific (STSI)
Star Scientific engages in the manufacture, distribution, and sale of consumer products, dietary supplements, and dissolvable tobacco. They also have several products which have a botanical-based component designed to treat a range of neurological conditions including Alzheimer's disease, Parkinson's disease, schizophrenia, depression, and tobacco dependence. Its products primarily include Anatabloc for anti-inflammatory support, and CigRx, a tobacco alternative.
The company also develops, implements, and licenses technology behind its proprietary StarCured tobacco curing process, which prevents the formation of carcinogenic toxins present in tobacco and tobacco smoke. In addition, it is involved in the development, manufacture, marketing, and sale of less toxic and dissolvable smokeless tobacco products. These include ARIVA compressed powdered tobacco cigalett pieces, STONEWALL Hard snuff, and modified risk tobacco products.
Moving Factors: Chart and possible catalyst.
Star has received favorable FDA rulings regarding its smokeless tobacco products in the past, but it's not the tobacco products I like about the company. I'm much more interested in the compound Anatabloc, which could be used for treating chronic inflammation associated with disorders such as thyroiditis, cancer, arthritis, Alzheimer's disease, and multiple sclerosis.
Anatabloc contains the dietary ingredient anatabine citrate. submitted a New Drug Application (NDA) for Ponatinib to the U.S. Food and Drug Administration. ARIAD is seeking U.S. marketing approval of Ponatinib in patients with resistant or intolerant CML Ph+ ALL. The company is seeking accelerated approval for Ponatinib by the FDA and has requested a priority review of the application.
Ariad expects an FDA approval decision for the drug sometime in Q1, 2013. The company's stock price has risen at a parabolic rate from around $0.45 in a little over 3 years, to a recent 52 week and all-time high of $25.39.
The chart looks very bullish to me, showing a nice continuation triangle and a strongly trending upwards RSI. $25 a share looks to be close on the horizon. Traders and investors might want to consider an entry point in the stock when and if the stock shows moments of weakness.
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Disclosure: I am long (STSI). I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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