Key Biotech Issues To Watch (XBI, ANIK, BCRX, CBST, DNDN, GILD, ILMN, TRGT)

Biotech is a sector which is often mixed with a hodge-podge of winners and losers based on news flow from analysts and/or key drug developments which often have very little to do with the broad market on any particular day.  The SPDR S&P Biotech (NYSE: XBI) showed the first signs of life on the candlestick charts on Tuesday and we wanted to review some of the top biotech and emerging pharma issues for this Wednesday.

Anika Therapeutics, Inc. (NASDAQ: ANIK) and BioCryst Pharmaceuticals, Inc. (NASDAQ: BCRX) were both added to the Zacks #5 Rank List today, which is the list that is called its STRONG SELL LIST.  This does not usually create huge moves on the day as investors discount these rankings but they may need to be reviewed for the longer-term outlooks in the calls.

Cubist Pharmaceuticals Inc. (NASDAQ: CBST) is set to report earnings after the close of trading today and investors will be watching closely as the infection-fighting leader is up substantially over the last two years.  Thomson Reuters has estimates of $0.44 EPS and $209.4 milllion in sales.  This one is no longer cheap at 22-times this year’s expected earnings and 20-times expected 2013 earnings.  This is on the heels of the company announcing positive results from its ENTEREG Phase 4 study in radical cystectomy procedures.

Dendreon Corporation (NASDAQ: DNDN) was noted on CNBC’s Mad Money last night by Jim Cramer as being too speculative without the sales numbers to warrant a buy.

Gilead Sciences, Inc. (NASDAQ: GILD) has said that it will present 30 abstracts covering its products and investigational agents for hepatitis B and C at the Annual Meeting of the European Association for the Study of the Liver (a.k.a. the International Liver Congress 2012) taking place April 18-22 in Barcelona, Spain.  Some data is new and other data is further advancement data.

Illumina Inc. (NASDAQ: ILMN) has lost much of its takeover hopes as the company is fighting to say that the $51 offer from Roche greatly undervalues the company.  Some call it the “Apple of Genomics” but shares have slid from over $52 down to $44 in recent days against a 52-week range of $25.57 to $79.40.  Shareholders are expected to vote today.  Call options were about 3-times normal trading volume yesterday.

Targacept (NASDAQ: TRGT) is likely to get some interest after Barron’s noted that it could be a long-ball stock triple.  Keep in mind that this is down 80% and it has a poor record so far.  Barron’s touted it as a developer which “partners with major drug companies to create novel therapies for depression, diabetes and Alzheimer’s disease.”

JON C. OGG