Friday, March 13, 2009
(Cont'd from above)...

Jim:      What works, how about CV Therapeutics, Inc. (CVTX)… I recommended this one back on June 15th of 2007.. when the stock was at $11... now after being the subject of a takeover battle between Estellis Pharma and Gilead Sciences Inc. (GILD*), a stock that I own for ActionAlertsPlus.com… a battle that Gilead won… CVTX is at $20.67, that is an 82% gain… oh by the way, if you held onto it buy all means… ring the register… even though I kept hearing that there might be a higher bid… I don’t care.

How about more recent picks… I recommended Axsys Technologies, Inc. (AXYS) back on February 13th at $40.. the stock then tanked going as low as $27.. then the company confirmed reports that it put itself back up for sale… and it is nearly back up to $40... it could go higher if anyone wants to buy it… but definitely not a victory.

Alright, now let’s talk total losers… GMX Resources Inc. (GMXR) a natural gas company that I recommended on February 6th at $23.84... it has taken a brutal, brutal 70% hit… that is bad… sometimes our speculative picks go up big… sometimes they go down big… sometimes they never do anything… but if we learn from the past we could usually do a better job of picking winners… so what does what does all of this tell us… I think the best speculative action right now is in bio-tech.

How about some real evidence… Empirical... $193b in pharma takeovers alone in the last month… to go with our experience… and we may be able to find a winner… so for this speculation Friday I am liking… Cougar Biotechnology Incorporated…

Despite Cougars misleading name it has nothing to do with older women… in fact, it is about older men… you would think Cougar Biotechnology would be a developer of drugs to help with menopause or something… but in fact they are focused on the male prostrate… now, I only put that joke in because I want my critics and detractors, or as I like to think of them as my less enthusiastic fans to know that I am not suddenly turning into someone who is boring and somber, whom you sure wouldn’t listen to and wants to be cancelled rather than be watched.

Now, Cougar is working on a treatment for prostrate cancer called Abiraterone… that works by preventing prostrate cancer cells from getting the hormones that stimulate their growth… if the FDA approves this drug it may have patent protection until 2014, or maybe 2017... you know that we want that, a lot of the drugs don’t have enough time between now and when their drugs come off of patent… Abiraterone’s recent phase II studies data looks good… one trial shows that 71% of the patients who used the drug saw more than a 50% reduction in prostrate specific antigens… this is the PSA thing… this is what doctors test for when they test for the disease… and fewer of them means that the drug is doing its job… containing the disease… another trial showed 48% of patients getting that 50% reduction in PSA’s… I mean that is just pretty promising given how tough prostrate cancer is to crake.

Cougar’s drug is currently in Phase III, okay… the first of which for pre-chemotherapy patients started in April 2008... the second study for pre-chemotherapy patients started earlier this year… the FDA granted both trials what is called a special protocol assessment… which is an acknowledgment that the drug meets an unmet need… even though the company is named after a cat… I doubt the President thinks this tiny little biotech that is trying to treat cancer is run by the typical pharmaceutical fat cats… all malefactors of great wealth, of course, who deserve to be skinned in the big health care shake up… but let’s get back to this non fat cat… perhaps even a lean wild cat… while Cougar’s drug looks good, you should know that in the past prostate cancer has been a real grave yard for biotech companies with lots of failed drugs.

Now, Cougar looks like it is doing pretty well though… and given the strength of its Phase II studies, I think the Phase III results could be strong catalysts to send the stock higher… we should see the interim data from the post chemo Abiraterone trial in the second half of the year… alright, we have six months… and final data from both trials expected in 2010...if the drug works out… huge opportunity for Cougar… as of now there is only one treatment for prostate cancer out there, and it could stand to be improved upon… don’t think of Cougar as a one hit wonder though… it has two other drugs in the pipeline… both are still in Phase I, which is way too early to go into the models… they have a drug called Nascapine, for multiple myleoma, a kind of blood cancer… and another prostate drug called Cynocolotrol.

Now, right now Cougar has the cash to hold out for two years… which matters because remember we won’t get until 2010 the big drugs approval, or not approval… it doesn’t need to raise money for two years… I think that if we get some good data from its prostate cancer drug… then this company would make a terrific acquisition for another biotech… by the way, the analyst who covers Cougar for Loring Swank thinks that Sufalone, Biogen Idec Inc. (BIIB), Genzyme Corp. (GENZ), Celgene Corporation (CELG*), which I own for my charitable trust, or Bristol-Myers (BMY*) could all be acquirers… but remember, this is speculation… little company with a market capitalization of less than $600m and it trades lightly… so please, if you are interested you must use limit orders and build your position slowly… buying small quantities.

I save these speculative names for Friday because the weekend is like a Taft Hardley mandated cooling off period… forcing you to be patient and do your homework rather than paying up for a stock immediately… a sure fire way to lose money… in my viewers I trust.

Bottom line…

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