Biotech stocks as a whole are still struggling, but we are very intrigued that many showed up on our latest screens, including two that made the cut for our Top Ten buy list, says Mike Cintolo, editor of Cabot Top Ten Trader.

Kite Pharma (KITE) is a development stage firm that is valued at $3.5 billion because it’s one of a new wave of companies attempting to cure diseases by altering a patient’s DNA.

Kite’s lead product candidate (known as KTE-C19) works by extracting T cells (a white blood cell that protects against disease) from a patient, genetically modifying them to attack lymphomas and leukemias and then injecting them back into the body.

Very early stage trials have been promising, with some patients exhibiting a total elimination of all signs of cancer.

Other positive news is that KTE-C19 has been designated orphan drug status for a certain type of lymphoma and separately, Amgen (AMGN) inked a deal to help fund other drug candidates, including a $60 million upfront payment and up to $525 million in milestone payments down the road.

If all goes well, Kite aims to file a biologics license application by the end of 2016 with a potential launch in 2017. It’s obviously a speculative situation, but with a big potential product and a partner like Amgen, Kite is a stock to keep an eye on.

KITE came public in June 2014, formed a nice IPO base, broke out in early October, and had a huge run, powering from $32 to $89 by January.

We don’t advise jumping in with both feet, but a small position on a dip into the mid-$70s would be tempting.

Based in Ireland, Alkermes (ALKS) focuses on treating diseases of the central nervous system, such as depression, addiction, and schizophrenia.

Vivitrol was the first Alkermes drug to gain FDA approval, for alcohol dependence in 2006 and for opioid addiction in 2010.

FDA approval is like gold to clinical-stage biopharmaceutical companies and Ireland-based Alkermes got a big pot of it last month; on October 6, the FDA approved Aristada, a treatment for schizophrenia.

The approval should allow Alkermes to capture a large chunk of the long-acting injectable atypical antipsychotics market for schizophrenia treatment.

ALKS has had an up-and-down year, but it’s shown strength of late. Since the market bottom on September 29, ALKS has bounced from $55 and now  trades well above its 50-day moving average.

It’s a speculative play, to be sure, but ALKS is setting up well for another big push if the market gets going again. If you decide to buy, set your stops near that 50-day average in the mid-$60s.

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