Will Trius Be The Next Big Small-Cap Biotech Mover?
Scott Matusow | Jun 04, 2013 09:17AM ET
Normally, I write about biotech companies with near-term catalysts I feel offer traders good long based trade opportunities heading into these catalysts. Every so often, I find a small cap biotech where I feel a speculation investment is truly warranted. This year, a few small cap companies have realized strong and steady stock appreciation long after their respective catalysts events have come and gone.
Trius Therapeutics, Inc. (TSRX) is one such company I strongly believe is a great speculation investment which could see strong stock appreciation, after its positive catalyst has come and gone. Also, I feel it's likely the company will be acquired soon based on some factors I will mention in this article, notwithstanding the strong buzz I have been hearing in this regard.
Company Treatment Platform:
- Methicillin-resistant Staphyloccus aureus
Strong antibiotics have become of increasing importance as bacteria mutate to become resistant to current treatments. Even though an antibiotic can kill a majority of the bacteria and rid a patient of symptoms, stronger and more resilient bacteria survive. Over time, that bacterium replicates and becomes the majority of that population. To combat a new strain, scientists are continually developing newer and stronger antibiotics.
ran a story in February this year which stated that there has been a sharp jump in the number of rare but potentially deadly types of super-bug bacterias resistant to nearly all last-resort antibiotics. As mentioned, Congress took action passing The Gain Act, to incentivize companies to develop new treatments to combat this problem, as new strains become more resistant to current treatments on the market.
Considering all these factors, my one year price target opinion for Trius is $20 a share, which would roughly equate to a $1B market cap -- or what was reportedly offered by Cubist for another company in the segment. As already stated, I believe the stock will cross over the $10 mark soon.
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