Aryx Therapeutics (ARYX)

1) zzlh's insight on the pipeline

2) 14 day RSI creeping above 50 just now

3) Insider confidence in purchases late in 08

4) general consensus.

About a month ago, I made the declaration that I will not make any more biotech red thumb picks. The problem is that the very nature of the sector lends itself to constant speculation and smooth-talking companies with no real prospects can sweet talk investors for years before the market finally realizes they are worthless.

So now I'm convinced that the only way to make money in biotech is playing things on the long end. Only problem is that picking the winners is much more difficult than picking the losers. Also, consider the fact that I have no medical background and I am obviously not the best judge of these things.

I like what I've read about ARYX and believe they have some positive catalysts. The zzlangerhans green thumb pitch has also helped sway me. I have no confidence in my ability to pick biotech stocks, though, so take everything I say with a grain of salt.

testing results will be positive.

This pick represents something of an improvement over my entry price of 8 a year and a half ago. Since that time pipeline developments have been generally positive, despite the share price dwindling as low as 1.5 in the darkest hours of small cap pessimism. I dumped that outperform with a positive score a couple of weeks ago, expecting a pull-back which has arrived and hopefully stabilized. The major short-term catalyst is topline data from the EmbraceAC phase II/III trial of anticoagulant ATI-9242 (tecarfarin). This is an exciting catalyst at such a low entry price for two reasons - the extraordinary number of patients on long-term or lifelong anticoagulation for chronic conditions, and the similarity of tecarfarin to the generic standard of care warfarin. The theoretical advantage of tecarfarin is avoidance of the cytochrome P450 metabolic pathway, which is primarily responsible for the unpredictability of warfarin anticoagulation. As a clinician, I know that warfarin is a troublesome medication responsible for a great deal of unnecessary morbidity and mortality, and is seriously overdue for an upgrade. Tecarfarin represents a potential multi-billion dollar opportunity.

Regarding the rest of the pipeline, phase II data for anti-arrhythmic ATI-2042 (budiadarone) in atrial fibrillation from earlier this year was encouraging and could easily lead to an out-licensing or partnership. Pro-kinetic ATI-7505 took a body blow with P&G's termination of their partnership but remains a viable late stage compound for functional GI disorders. The company continues to accumulate supplementary safety and efficacy data as they seek a new licensing agreement. Aryx has multiple avenues for success in the short and mid-term (and of course multiple avenues for failure as well). But with a market cap barely over 100M, reward outweighs risk when evaluated against the broad backdrop of small cap biotech. This green thumb represents a win-win situation for me as I will certainly buy a couple of thousand shares of Aryx if the price drops back below 4 in advance of EmbraceAC topline data.

new drug

The idea behind this company is simple and brilliant (a real why didn't I think of that). Take drugs that have been in use clinically for many years but have some unfortunate side effects. Use modern chemistry to improve the drugs and decrease side effects, creating less adverse effects, patent the new drugs and sell. Since the drugs will compared to the 'standard of care' by the FDA (the old drugs) these new chemical entities have a very good chance of being approved. All the fun of drug development with out the need for discovery. clever.

A short term outperform which wil buffer my late choice on Bear Sterns

provides medical supplies, new company, medical to become #1 in older needs