Back in the GBMB hunt
I'm overdue for a GBMB update but I'm planning on making the next update a sweeping analysis of the performance of all the GBMB stocks whether or not I eventually bought them. Translation - huge investment of time which may have to wait until after I get back from vacation in mid-March. But the recent instability in Arab regimes has helped shake a few new players into GBMB territory so I wanted to take the opportunity to expand my harem.
Nektar (NKTR) - market cap 909M, share price 9.64. Cash 303M, debt 234M, burn 6-9M/quarter. Nektar had a great upward run from the 2009 crash that culminated in a price of 16 last fall. Investors were obviously happy with a lucrative deal with Astra-Zeneca on PEGylated anti-opioid NKTR-118 as well as significant progress with PEGylated irinotecan NKTR-102 in multiple tumor types. Four months later, Nektar is sliding into the single digits after the company announced they would proceed to phase III trials of NKTR-102 without a partner and promptly raised 220M in a dilutive financing. How much lower can Nektar go? Keep in mind that the market cap doesn't yet reflect the new shares from dilution so the value isn't as good as it looks on the surface. The downward momentum on the six-month price chart is ugly. And it's unclear if there will be any significant positive catalysts before ASCO in May. But the company does have a promising anti-neoplastic agent in NKTR-102 as well as impending initiation of phase III trials from the AZ collaboration. I'll set a tentative GBMB buy level of 9 but I want to see a clear break in the losing trend as well as a better idea of the 2011 timetable with the next quarterly call on March 1.
Icagen (ICGN) - market cap 16M, share price 2.75. Cash 12M, debt 1M, burn 2-3M/quarter. Lest I be considered a market cap snob, I give you Icagen with a cap less than 20M. Icagen has had it tough the last few years with successive failures of their lead pipeline compounds for sickle cell anemia and asthma, leading to a sub-1 price and eventual reverse split. I was watching the stock closely as it hovered near 1 last fall but missed the rise which began after the company initiated a phase I trial of Pfizer-partnered pain drug Nav1.7 in healthy subjects. What's that you say? Phase I trial? Healthy subjects? Welcome to the world of mini-micro cap biotech, where the smallest catalysts can double your share price or cleave it in twain. The share price almost hit 4 this month after the FDA lifted their second clinical hold on epilepsy candidate ICA-105665, and the company announced they would resume the phase II trial. I haven't even green thumbed Icagen yet, although BravoBevo is still chewing a bite he took in January. I need Icagen to head a lot further back towards their quiet litttle hole before I would venture a buy, but since the share price changes fast I wanted to load them into the chamber. I'll probably green thumb them around 2 and consider a GBMB buy at about 1.5.
I've got a couple more in mind but I might wait until after earnings to speak with some more clarity. Stay careful out there ...