toopersent (< 20)

Time to get risky: Buying the Pharm

July 13, 2009 – Comments (3) | RELATED TICKERS: RIGL , JAZZ

If you're like me (young, handsome, charming)...okay, maybe not the last two, but if you are tolerante to risk because you have a stash of money that you don't need to touch, then I've got a solution to qualm those itchy trigger fingers. Yup, I'm about to rec buying some highly speculative pharm companies.  If you don't have the stomach for it, I suggest you stop reading.  However, if you have a 401k/IRA that you can't touch for 20+ years, or maybe a relative kicked the bucket and now you have some play money...whatever the case, this might make sense to you.

Pharm is notorious for giving investors that roller coaster thrill ride.  You know, the ups and downs, the loopty-loops...they sick feeling you get after eating too many corn dogs and then riding the Shockwave three times in a row.  Sure, you can go ride the kiddie rollercoasts; the Pfizers of the them park that are just so damn boring sometimes.  But not me...not this guy. 

So here we go ladies and gentlemen.  Keep your hands inside the car at all times and please, try not to ralph on the guy next to you. 

First up, I like JAZZ PHARMACEUTICALS INC (JAZZ).  Thats right...I'm starting off with a 1 star stock.  Just to make things fun.  They just released data proving that their new drug (JZP-6) is effective in reducing pain from fibromyalgia.  And here is the kicker...the drug is already on the market for treating narcolepsy so the concerns about it not getting approved by the FDA for treating fibromyalgia are pretty low.  Its also a $4 stock, so you can get in cheap and you don't need much to get in.  A word of warning though, JAZZ ain't been around for too long.  And they pretty much only have two mediocre drugs to fall back on, Xyrem(which is the same thing is JZP-6 to treat narcolepsy) and LuvoxCR (which treats social anxiety and OCD).  So tread with caution.

My second recco you might have heard about recently.  I really really really like Rigel Pharm (RIGL).  It's jumped up recently on news that phase II results of its drug R788 significantly improve rhumatoid arthritis (RA).  There were concerns that the drug caused an increase in blood pressure, which it does, but the phase II results have shown that the increase in BP is treatable with other drugs that do not react to R788 negatively.  This is huge news for them.  There are over 2 million people suffereing from RA so this drug has potential to really make some money for them.  The only concern now is finding a partner to share the cost of phase III testing.  RIGL doesn't have a lot of funds, and they need to find someone quick. 

 So, go forth and pharm, but please...remember this is HIGHLY SPECULATIVE.  A lot of things can go wrong, mainly non-approval from the FDA.  Not to mention future law suits and blah blah blah.  I own stock in both of these companies, but I'm diversified as well.  Enjot!