any thoughts on Telk.......made a nice move today and is up in ah trading
http://www.3stocksonfire.org/trading/index.php?topic=6887.15
I keep meaning to start a new thread on fallen biotechs that are recovering (i.e. ELN and POZN) but I find my time lacking lately. Sometimes the fall that these stocks take is a severe overreaction to bad news, giving us the opportunity to buy at deep value. This isn't a suggestion to try to catch a falling knife. Investigating these stocks and understanding why the fall happened and the potential for recovery is key in determining the potential for a trade. ELN had deadly side effects from Tysabri, a drug that was considered by far the best MS drug available. POZN received an approvable letter from the FDA on what was considered an outstanding migraine drug. The next potential fallen biotech candidate is TELK.
TELK dropped over 70% last month on this:
Telik shares plummet on disappointing cancer-drug trial (http://www.marketwatch.com/news/story/telik-shares-plummet-disappointing-cancer-drug/story.aspx?guid=%7BB6B059A8%2D4E4F%2D4DC7%2DA12B%2D67D3824C29F4%7D&siteid=yhoo&dist=yhoo)
I'm not sure what the catalyst will be for TELK to recover but either the recovery has started or short covering is moving the stock up. This past week TELK broke above resistance at 5.20 and continued to move up closing the week above 6.00 on increasing volume.
Playing these fallen biotechs is risky but if you can find one, like TELK, that has not only stopped moving down but has shown strength to the upside, the rewards can be enormous.
When I have time, I'll start a thread on these fallen biotechs, what to watch for and how to play them.
Nasty shooting star doji yesterday! News was also announced yesterday that Carl Icahn has taken a 9.92% stake in TELK. I don't know what effect this will have on the share price but it can't be bad that an investing icon believes in the company. Stock moved up after hours but has pulled back some this morning. After listening to the last 2 conference calls this past weekend, the probable potential catalyst will be the speculation that TELK's cancer drugs will find success in their late stage trials. The company is still confident in the drugs and believe there will be eventual approval for treatment of some of the forms of cancer being tested for.
Updated chart...
(TELK)
Telik Shares Soars on Monday After FDA
Removes Partial Hold on TELCYTA(R) Trial
Share of Telik, Inc. (TELK) soared in Monday's session on a report that
the FDA had removed the partial hold on TELCYTA(R) (canfosfamide
HCl) clinical trials. This action follows a complete review of TELCYTA
data by the agency and permits the resumption of TELCYTA clinical
development. The FDA had temporarily halted clinical trials for the drug
over safety concerns. Telik will likely seek a partnership with another
pharmaceutical company to fund new Phase III trials for this lead candidate.
BMO Capital Markets analyst Jason Zhang said he didn't believe
such an agreement was imminent. "Given the previous negative
data, I think a partnership is very unlikely in the near future," Zhang
said. "My guess is that without additional positive data it will difficult
to get a partner." Needham & Co. analyst Mark Monane said the FDA
announcement is positive for the Company. TELCYTA is a tumor-activated
small molecule product candidate in clinical development for the
treatment of advanced ovarian cancer and non-small cell lung cancer.
Platinum and taxane-based drug combinations are the current standard
for the front-line chemotherapy of lung and ovarian cancer. Platinum
drugs include Bristol-Myers Squibb's (BMY) Paraplatin(R)(carbopla
tin) and Platinol(R)(cisplatin). Taxanes include Bristol-Myers Squibb's
Taxol(R)(paclitaxel) and sanofi aventis' (SNY) Taxotere(R) (docetaxel).
A second development candidate, TELINTRA(R), a small molecule
bone marrow stimulant that is in clinical development in myelodysplastic
syndrome (MDS), a form of pre-leukemia disease characterized by
defects in the blood-producing cells of the bone marrow. The drug may
also have utility in the treatment of additional blood disorders. A Phase 2
clinical trial demonstrated clinically significant improvement in all blood
cell lineages and across all major MDS subtypes. A Phase II trial using
a tablet formulation of TELINTRA in MDS is also currently ongoing.
Pharmion Corp.'s (PHRM) FDA-approved Vidaza(R)(azacitadine) is indicated
for MDS. Paharmion is also conducting a Phase I trial that will
assess the maximum tolerated dose, dose limiting toxicities and safety
of oral azacitidine for MDS. The FDA recently granted Fast Track designation
for this oral azacitidine treatment. MGI Pharma, Inc. (MOGN)
Dacogen(R)(decitabine) is also used to treat myelodysplastic syndromes
As of June 30, 2007, the Company had an accumulated deficit of $423.6
million and cash and short-term investments of $112.4 million.