Today's 3 Biggest Moving Biotechs


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Biotechnology stocks are never short on volatility and today was no different as markets turned lower and biotech stocks were particularly hard hit. The Nasdaq Biotechnology Index ETF (IBB) dropped more than 2% as investors embraced safety and avoided risk. But while the 2% drop in the industry ETF was noteworthy, the move pales in comparison to the losses and gains posted by these three stocks. Zogenix (NASDAQ: ZGNX) and bluebird bio (NASDAQ: BLUE) sunk by 12% and 8%, respectively. And TherapeuticsMD (NYSEMKT: TXMD) surged over 30% higher. In the following slideshow, you'll learn what's behind the massive moves in these three stocks and see if I think any offer an investing angle worth considering.

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Today's 3 Biggest Moving Biotechs

  1. 1. Today’s 3 Biggest Moving Biotechs
  2. 2. Today’s 3 Biggest Moving Biotechs These three stocks made eye popping moves today as the S&P 500 fell and the Nasdaq Biotechnology Index ETF declined more than 2%. 1. Zogenix Inc. dropped more than 12%. 2. Bluebird bio fell more than 8%. 3. TherapeuticsMD popped more than 30% higher.
  3. 3. Zogenix (ZGNX) The FDA may end up having second thoughts on Zogenix’ ZoyhydroER, a highly addictive, long- lasting pain killing drug used to treat patients with chronic pain. Shares tumbled on concerns that the FDA’s granting of fast-track status to a potentially less addictive hydrocodone tablet from Purdue Pharma could imperil ZohydroER. •Loss of market share •Zohydro extended release launched in March 2014. •Doesn’t contain acetaminophen •Leading cause of liver failure. •1,141 prescriptions filled in Q1 •8,935 prescriptions filled through mid June. •Large market opportunity. •2.4 million of the 47 million patients taking instant release hydrocodone with acetaminophen take it for chronic pain. •Loss of marketability •The FDA has indicated that there is a possibility of pulling ZohydroER from the market if a less addictive alternative is approved. •However, a crush-resistant ZohydroER should head to regulators later this year.
  4. 4. Zogenix (ZGNX) continued In Zogenix’s June investor presentation the company boasted that ZohydroER’s market opportunity could prove significant. •2.4 million patients. •30 day treatment cycle. •$240 million annually in gross sales potential. Today’s news casts doubt on the ability for Zogenix’ to achieve that target, shifting attention to Zogenix’ efforts to create tamper resistant and less addictive versions of the drug.
  5. 5. Bluebird bio (BLUE) The clinical stage biotechnology company is researching novel treatments that seek to insert missing genes into patient stem cells to treat a variety of disease including cancer and autoimmune disorders. Bluebird announced Monday night that it would dilute current investors with a new share offering. • $100 million common stock offering. • An option to purchase up to an additional 15% of the number of shares to be issued. •Dilutes current investors by roughly 10%
  6. 6. Bluebird bio (BLUE) continued The dilution will help bluebird boost its cash stockpile following a dramatic run up in its share price. Since its low in May, bluebird’s shares have roughly doubled. That cash will help bluebird advance its promising drugs through the pipeline, including Lenti-D for childhood cerebral adrenoleukodystrophy and LentiGlobin for beta-thalassemia and sickle cell disease. In addition to more cash, bluebird also boasts a well-heeled partner in Celgene, which paid bluebird $75 million up front to work together on modified T-cell gene therapies.
  7. 7. TherapeuticsMD (TXMD) TherapeuticsMD is developing women’s health treatments including hormone replacement therapy and Wall Street research firm FBR initiated coverage on the stock with a buy today, sending shares higher. •Coverage was initiated at outperform (a de facto buy rating. •FBR set a price target of $34 per share. •TherapeuticsMD shares closed at $5.47 on Monday following the research update.
  8. 8. TherapeuticsMD TherapeuticsMD has four promising drugs in its pipeline: 1. TX-001HR (Phase 3) • The first and only combination drug designed to replace the exact 17ß-estradiol and progesterone hormones the body has stopped producing to treat the symptoms of menopause. 2. TX-002HR (Phase 3) • A progesterone product under development for the treatment of secondary amenorrhea. Women who have missed at least three menstrual periods in a row have amenorrhea, as do girls who haven't begun menstruation by age 15. 3. TX-003HR (Pilot studies) • Treats post-menopausal women with moderate to severe vasomotor symptoms, including hot flashes. 4. TX-004HR (Phase 1) • In development for vulvar and vaginal atrophy.
  9. 9. Fool-worthy thoughts All three of these companies have risks. Zogenix could find itself on the sidelines if the FDA backs away from its prior approval. If so, Zogenix’ investors would have to hope that a new anti-tamper (non-crushable) variation can make it quickly through regulators. If it can’t, then eyes will shift to 2016, when Zogenix hopes to have enough data on its less addictive extended release variation available for an FDA filing. Shares in bluebird may have tumbled, but they’re still up considerably this year. The company has a deep pocketed partner in Celgene, but that won’t guarantee ongoing success in trials or keep bluebird from further offerings if needed. TherapeuticsMD has interesting late stage drugs targeting a big and growing market; however, the company doesn’t have any revenue, so shares are likely to remain volatile until data from its late stage trials is available, which should happen over the next year. Given Zogenix’ risk appears greatest, I am staying away for now, but both bluebird and TherapeuticsMD may be intriguing for risk tolerant investors.
  10. 10. Leaked: This coming blockbuster will make every biotech jealous The best biotech investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not just how we treat a common chronic illness, but potentially the entire health industry. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns you will need The Motley Fool’s new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.