See ONXX's official
investor relations' site
here.
See the Yahoo!
Finance profile for
ONXX
here.
See Opening Segment 2,
below...
After this segment, you
can see Jim's Lightning
Round picks
here...
. . . .
.
JJC: If
you want to know which
country will walk away
with the most gold medals
in the Chinese-communist
Olympics, you're asking
the wrong guy... and also,
of course, the angry,
pre-empted guy (referring
to his 6pm show being
replaced by the Olympic
coverage over the next two
weeks)...
But if you want to know
which group of stocks will
outperform the rest... the
true "equity Olympians"...
sans killer smog...
you've come to the right
place... so, listen up!...
Right now, I think the
best names are coming out
of biotech... in my
not-so-humble opinion...
Biotech stocks will
continue to deliver!
There are, of course,
actual reasons for this.
It's not just stock market
hocus-pocus..
Biotech has been the
best-performing group of
the year, with Cramer-fave
Genentech Inc. (DNA)
up 45%, since the
beginning of the year,
thanks to that great
takeover bid from Roche.
How about
Imclone Systems Inc.
(IMCL),
up 49%, courtesy of
another bid, this time,
from
Bristol-Myers
(BMY)...
And good old
Amgen Inc. (AMGN),
powering on its own, up
37% so far this year.
Well, no one's made a bid
for it, but it be
moving...
I don't think you've
missed the move though.
In fact, I think it's the
middle innings...
Just about the time when
the Mets pull their
starters for that weak
bullpen...
. . . .
.
There are five reasons why
I think biotech is the
number one group to own
throughout the fall....
First of all... the
last time we had a bank
crisis in this country,
that kept interest rates
low... something that
makes the big-money guys
more willing to pay up for
the growth that biotech
companies have.
In 1990, biotech companies
was the group to own hands
down... AMGN leading the
charge... Same
deal... Throw in the
fact that we're now in a
lower inflation
environment, and interest
rates are going lower...
Look at the cost of
natural gas, oil, grains,
copper...
Practically all of the
commodities are falling.
I think this is the
perfect environment for
biotech, since low
inflation makes the future
earnings of these
companies - and those
earnings are the reason
you'd be buying them -
more valuable in real
terms.
Second... the
democrats are looking
still pretty good here.
They adore biotech
companies. For some
reason, the democrats have
historically hated and
despised big pharma, while
they are in love with
small pharma... they love
it... and biotech
companies are small
pharma.
Third... even
though there will always
be a slew of newspaper
stories whining about the
prices of drugs that give
terminal cancer patients a
few precious months of
life... and, while that
may knock the stocks down
temporarily... we know
from the case of
Genentech Inc. (DNA),
which we recommended right
after it got hit with a
New York Times hatchet
job, that the journalists
know nothing and, of
course, people are usually
willing to pay up for
these drugs... and, then,
what happened? We
walked right into a huge
takeover bid...
Ripped from the
headlines?...
Not!...
The Fourth Reason I
like this group...
is that the takeovers in
biotech have been coming
hot and heavy...
In July alone, there were
six proposed deals.
How about this?...
Eli Lilly & Co. (LLY)
buying SGX Pharma... $64
million. Biopharma
buying LevPharma... $443
million.
Sanofi-Aventis (SNY)
buying... $550 million bid
for Acambis...
Bristol-Myers Squibb Co.
(BMY)
$4.5 billion bid for
Imclone
(IMCL)...
Roche is looking to buy
Genentech Inc. (DNA)...
Forget it! They'll
never get it this cheap...
45% it doesn't own for $44
billion... a price that
values the stock at $100
per share... And
though this one doesn't
quite fit the biotech
mold, it's a marriage of
generic drugs...
Teva Pharmaceutical (TEVA)
is trying to buy
Barr Labs (BRL).
That's a real surfeit of
deals. I think there
are many more coming.
Finally (the Fifth
Reason)... We like
biotech right now, because
this fall is usually
filled with medical
conferences and drug
approvals...
. . . .
.
For all of these reasons,
I'm giving you one biotech
name every day this week,
in honor of performance,
not the Olympics...
because I believe you'll
be cursing yourself, and
maybe me, come this
autumn, if you don't have
some biotech exposure.
So who fits the theme in
today's issue?...
Onyx Pharmaceuticals Inc.
(ONXX)...
a $2.2 billion biotech
company with what seems to
be a great cancer
franchise. I think
it's looking absolutely
right for the kind of
foreign takeover that we
saw with Roche and Genentech Inc. (DNA),
courtesy of the weak
dollar, which makes it
easier for the Europeans
to buy out American
companies for much less
than they would have a few
years ago. Remember,
if the dollar's bottomed,
which it has, they get
interested...
A template for this
theme... remember,
because of the banking
crisis, and the fact that
the democrats seem poised
to seize the White House
in November, I say why
wait for election day?
We need another October
revolution!...
I think any biotech should
work, but we want more
than just any old
biotech... We want
the ones with
life-extending cancer
drugs... the kind the
newspapers love to rail
against... and I say
Onyx Pharmaceuticals Inc.
(ONXX)
has one of those...
It's called Nexavar.
It targets the formation
of new blood vessels,
starving tumors of the
blood, and also the
proliferation of tumor
cells, making it unique
among cancer wonder
drugs... because it
supposedly does both of
these things.
ONXX's drug was approved
for kidney cancer in 2005.
Before that, it was just a
death sentence.
Nexavar has been approved
for liver cancer...
another one that almost a
death sentence... in over
40 countries.
ONXX got approval from
South Korea, where the
market for this type of
liver cancer treatment is
the same size as the
U.S....
It is expected to get
approval for Taiwan
soon...
Like Genentech Inc. (DNA)'s
Avastin, Nexavar seems to
be a big, big drug with
tremendous potential for
treating numerous,
different types of
cancer...
We know from Bayer, ONXX's
Nexavar development
partner, that Nexavar's
sales grew 107%
year-over-year to $168
million in the second
quarter. That is
unbelievable...
I think this drug,
Nexavar, has blockbuster
written all over it...
meaning, eventually, I
think it's going to do
over $1 billion in sales.
Wow... maybe even more
than that.
ONXX is running more
trials for Nexavar...
Five additional ones for
kidney cancer. This
is, by the way, what drew
us to
Celgene (CELG)...
remember? There were
many different trials for
Revlimid... That's what's
happened to Nexavar...
Four additional trials for
liver cancer, two for
melanoma, which is not yet
approved for... four
additional ones for lung
cancer...
This drug hasn't been all
good news for ONXX
though... Back on
February 18th, they halted
a Phase III trial for
first-line treatment for
non-small cell lung
cancer. And interim
analysis revealed that the
trial's results wouldn't
meet the primary end point
for overall survival.
The Street had been
expecting ONXX to launch
Nexavar for first-line
treatment of this type of
lung cancer in 2009.
No. Local sales
potential was $900
million. The halted
trial meant that the
launch could be delayed
until 2011... maybe even
beyond...
The news pancaked the
stock... just crushed
it... the house of pain...
$45 to $30 in a matter of
days...
I'm not concerned.
Genentech Inc. (DNA)'s
Avastin got dinged by the
FDA a couple of times...
but I say a blockbuster is
a blockbuster, unless it
rents movies...
. . . .
.
Now let's go back to the
biotech rubric because, in
my opinion, ONXX has one
more thing we love in a
biotech stock, and it is
takeover potential!...
Since 1994, ONXX has had
that... Just like Roche -
a Swiss company - is
trying to scoop up the
rest of Genentech Inc. (DNA)...
It would not shock me to
see Bayer make a bid for
ONXX... buy, buy,
buy!... as the strength of
the Euro versus the dollar
makes ONXX especially
cheap for a European buyer
like Bayer...
Here's the bottom line...
. . . .
.
The Bottom Line!:
We should still want biotech, and I
think
Onyx Pharmaceuticals Inc.
(ONXX)
fits the profile of what we're looking
for exactly. All week, keep
watching, because I've got three more
great biotech names just like ONXX...
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Second
Segment
Opening Segment 2
Title:
'Smooth
Sailing'
. . . .
.
Featured Stock(s):
General comments about the market...
about inflation being dead... and that's
good for the stock market.
No specific stock picks.
After this segment, you
can see Jim's Lightning
Round picks
here...
. . . .
.
Jim: Ladies
and gentlemen, welcome to
Nirvana... The rally of
last week that continued
today is real... but what
is it about?...
You need to understand
that we are out of what
the bear does in the
woods... although I
hesitate to say we are in
the bull ring...
You need to know why
happier times are here
again, and people who own
stocks - and not just
those who bet against them
- are, at last, making
some dough...
And, of course, you need
to know the best stocks to
buy. And it's my job...
the crazy, sad-clown
Cramer... to make you
money...
It is time to explain what
gives this rally some
bovine legs that can
last...
And the answer is one word
that you haven't heard...
you haven't heard it in a
long time... The
answer is...
Deflation...
Deflation...
That is a word you should
love and embrace...
I believe this market is
being driven by the
triumphant crushing of oil
prices... the
smashing of gold...
the assault and battery of
copper... the
beheading of grains... and
the mutilation of natural
gas.
The prices of everything
I've just named are coming
down... anything
that can be grown...
anything that can be
mined... anything that can
be drilled... are coming
down. And, for
the rest of the market, it
is simply glorious...
. . . .
.
The Bottom Line!: I think inflation is dead.
Long live deflation... especially in
oil, because it has created a rally that
I think will last in the financials,
retail, high-multiple stocks, companies
that raise prices to deal with expensive
commodities, and shouldn't have to lower
them... in the "happier days are here
again" stocks that need lower gasoline
and lower prices... even in
tech... and I say, "hallelujah!"
■
Stock Snapshots - Includes
all stocks mentioned above
■
Jim
Cramer's
rating on
this stock
STOCK
SYMBOL
Closing
price
that
day
Opening
price
next
day
Full Company
Name/Comments
(see comments above for
each)
na
na
na
General comments about the market...
about inflation being dead... and that's
good for the stock market.
No specific stock picks.
Go to the LIGHTNING ROUND from
tonight's show
here >>
See current quotes on Yahoo!
Finance from
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Jim mentioned it is a stock
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his
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he would buy the stock or,
at the very least, not sell
the stock. We do our
best to interpret Jim's
opinion on stocks, as we
think it is indicated by his
comments during the show.
Please read his comments to
decide for yourself.
Thumbs down -
indicates he has said not to
buy or to sell the stock,
based on his comments
We do our best to interpret
Jim's opinion on stocks, as
we think it is indicated by
his comments during the
show. Please read his
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yourself.
Back up the truck -
indicated by Jim, when he
says the stock is so good,
that he would do a
'mon-back' on the stock...
In other words, this is the
sound someone would say to a
truck driver, "Come on
back... " as he is "backing
up the truck" to load up on
his cargo. Translation
for buying stocks:
This recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
Stumped. - Of the
2,000+ stocks that Jim
Cramer has in his head, for
which he has an informed
opinion, he sometimes comes
across a caller with a stock
he does not know well enough
to opine on... He then
indicates he is stumped and
will have to come back to
it, after he does some
homework of his own on
the stock. This
usually occurs during the
Lightning Round, when Jim
does not know in advance who
is calling, or what their
stock question is about.
Definitions of key phrases
used by Jim, known as
"Cramerisms":
Definition: 'Pull the
trigger' is Jim's phrase for making
the decision at that point to trade -
either to 'buy' or
to 'sell' (although he
usually uses the phrase for
buying), as if to say you
should feel comfortable
enough to make the final
decision without looking
back...
Definition: 'Ring
the Register' is Jim's phrase for
selling a stock, and making
it a final sale, that you
should not look back on.
Put it behind you.
Definition:'Let It Come In' indicates how you
may wait for it to pull back, or have the
stock price come down briefly, as your
chance (after letting it come in) to buy
the rest of your position (i.e., total
number of shares you own in that stock).
Definition:'backing it up'
or 'doing a 'mon-back' is Jim's
phrase for the metaphor of backing up a
truck to load up on a stock by buying
it. 'Mon-back is short for the
imaginary worker saying, 'Come on
back...' as the truck is backing up to
receive its load... Notice that we use
the little truck icon to indicate where
Jim has mentioned this.
Translation for buying
stocks: This
recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
See more
"Cramerisms" & other
financial phrases
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