Is It Too Late For Biotech?

06/05/2014 11:16 am EST

Focus: STOCKS

Hilary Kramer

Editor, GameChanger Stocks

GameChanger's Hilary Kramer has two biotech stocks that she still likes even though the industry group has dropped sharply from its recent highs.

SPEAKER 1:  Hi.  I’m here with Hillary Kramer today from Gamechangerstock.com.  She is the editor there.  I want to talk about biotech a little bit today; so, what’s going on with the biotech.  As you’ve had a bit of selloff.  It’s coming back.  Do you like the industry itself?

HILLARY KRAMER:  I still believe that there is opportunity in the biotechnology space because finally, we’re in that final phase where we can actually have therapeutics, medications that really work.  The promise we thought would come to fruition 15 years ago is finally there now.  A company like Intercept Pharmaceuticals, ICPT – oh, I love Intercept.  That was my top pick at The Money Show last year.  I sat here and talked about it at $60 a share.  Now at $250 a share it’s still a buy.  The stock has been as high as $497, and will get there again.  What is the story on Intercept Pharmaceuticals?  It is a company that specializes in medication for liver duct disease.  This would be considered an orphan disease, which means less than $200,000 in the United States suffer from this particular bile duct disease.  However, there are applications that this medication could help throughout liver diseases.  Therefore, the growth potential on the revenue side is tremendous.  Intercept in phase three trials had really excellent results that were announced in March and April.  Now, once it’s actually rolled out in Europe and the United States, we should see Intercept most likely get acquired. 

SPEAKER 1:  They just pulled back from 400-something…

HILLARY KRAMER:  Well, what happened is when the news broke about the phase three trials and this immense success, the drug is called OCA for this bile duct disease in the liver.  The only competitor just really doesn’t have the same therapeutic value on any level to OCA.  When the news came out the stock over a two-day period in January – because the news first started coming out in January and then was released officially – the stock jumped.  No one really knew what the potential was and the numbers had to be determined.  Then there was a rumor that came out that there were side effects from the drug.  It produced cholesterol.  Suddenly the stock came back down, but we’re going to see Intercept come back up; because if you just do the numbers about the multibillion dollars of revenue potential….

SPEAKER 1: Is it attractive right here for investors?

HILLARY KRAMER:   Intercept is attractive right here in the 200s. 

SPEAKER 1:  Is there a cheaper stock that you have?

HILLARY KRAMER:  I have a $2 stock for you – Inovio, INO.  Inovio makes a cervical cancer vaccine that seems to be very effective, attacks the precancerous cells.  Cervical cancer vaccines have had quite a trend of becoming something that could be applicable for every woman.  As well, the applications of the way that this is formulated, attacking the T-cells and the immune system.

SPEAKER 1:  Sure, attacking other cancers potentially.

HILLARY KRAMER:  Yes, absolutely; even maybe pancreatic cancer.  Inovio is also looking at HIV vaccine; INO.  It’s really worth taking a look at.  We know that all biotechs are risky, but this one, the risk return ratio, you’re talking about $2 stock so it might worth a few pennies to take a bet.

SPEAKER 1:  Thank you, Hillary.  Thanks for joining us at moneyshow.com.

 

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