Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX)

CAPS Rating: 3 out of 5

A biopharmaceutical company focusing on the development and commercialization of innovative therapeutic products to treat the unmet medical needs of patients with debilitating conditions and life-threatening diseases.

Recs

2
Player Avatar zzlangerhans (99.69) Submitted: 4/23/2013 7:22:05 PM : Underperform Start Price: $4.85 PGNX Score: +14.04

Once in a while I truly amaze myself. While I've had my share of failures, sometimes I nail it to the wall. Back in October I green thumbed Progenics and had this to say:

"Progenics is a greased pig. It's very hard to catch this stock when the momentum is against you. and you usually end up very dirty for a while. But when the direction changes, it changes fast and boy does that ham taste good."

Sure enough, Progenics was far from done dropping, The stock hit a low of 1.5 in November after the FDA drove a sizable wooden stake through the heart of Relistor for OIC. Nevertheless, the stock redoubled to 3 in December and January and then roared as high as 5.5 in March in a move that I believe left even management scratching their heads. The company reported decent revenues in Q4 2012 but they were due to licensing fees, not increasing Relistor sales as this guy seems to think http://seekingalpha.com/article/1284841-strong-relistor-sales-drive-new-rally-in-progenics . Royalty revenue for the quarter was only 0.8M, up from 0.7M the preceding quarter and way down from 1.3M YoY.

I had a nice ride with Progenics in the CAPS world, although the stock is too unpredictable and irrational for me to risk real money with. Right now, I'm not seeing anything that makes Progenics at a cap of 220M more valuable than it was last October with a cap of 110M (or November with a cap of 60M). The purchase of Molecular Insight for 5.6M shares of common stock is a particular headscratcher. The value of the deal seems to be about 12M given the share price at the time of the deal, but last I remember Molecular Insight was declaring Chapter 11 bankruptcy with a market cap less than 1M two years ago. No one wanted them then, so why does Progenics want them now? It seems they're planning to unlock hidden value by using Molecular Insight's technology to create a PSMA-based prostate cancer diagnostic, but I have to say that any hidden value in Molecular Insight is extremely well hidden.

A phase II trial of PSMA cancer vaccine won't even complete enrollment until the end of the year, so I don't see any catalysts coming from that glacially progressing program this year. Relistor royalty revenues will continue to suck. As always, it's anyone's guess what will happen to Progenics' share price in the short term, but anyone foolish enough to be long at these levels needs to remember that the share price could just as easily be 1 as 5.

Featured Broker Partners


Advertisement