Cramer Speculates in CV Therapeutics (CVTX)

On tonight’s Mad Money on CNBC, Jim Cramer had his normal ‘Speculation Friday’ and talked CV Therapeutics (CVTX) for a speculative biotech in with Acadia (ACAD) and Nastech (NSTK).  Cramer said CVTX is a huge battle ground stock that makes small molecule drugs.  Last month it had 36% of the float short, but he thinks the bearish case just doesn’t hold up.  Cramer thinks the stock could explode into the $20’s because of earnings, or it could get acquired and go there.  Its Ranexa drug for angina is the driver now, but it could get approved as a diabetic treatment down the road.  It has a drug up for potential approval next year to detect cardiac disease. Cramer said it could fetch $20.00 to $36.00 per share if it was to be acquired.

Speculators and biotech investors should know that this one does lose money and it is expected to keep losing money: -$2.95 EPS for fiscal 2007 and expected to post -$1.31 in 2008 fiscal EPS.  This stock closed up over 5% today, and shares went up another 6% after-hours and after-Cramer to $12.08.  Its market cap at the close was $675 million and the 52-week trading range is $6.43 to $14.67.  For a history lesson, this has been public since 1997 and shares reached north of $80.00 back in 2000 to 2001.  This is one we can look at from before Cramer gave it the nod, and if we trust a "sometime in 2008 timeframe" then we can look at the JAN-2009 closest out of the money call options, or the $12.50 strike.  These didn’t trade today, but the closing levels looked to be $2.90X$3.20 with only 507 contracts in the open interest.  Also keep in mind that this stock experienced a mini-implosion back in March.

Jon C. Ogg
June 15, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.