Within the $40 trillion dollar US market, the biotechnology sector has become a hot investment option for those looking to hedge against a possible upcoming market correction. During the past six months, shares within the NASDAQ Bio Index (NASDAQ:IBB
) are up 20.12%, while the S&P Bio Index (NYSE:XBI
) matched those gains with 21.02%. This is not especially surprising when considering that the companies in this industry are guided primarily by the science behind the products rather than the economic environments surrounding them.
Many small pharmaceutical companies experience large percentage gains leading up to their new drug application (NDA) or potentially positive results from ongoing clinical trial results that may attract partnerships, buyouts and other attractive events for shareholders. No better company exemplifies these opportunities than Neoprobe Corporation (OTC:NEOP), whose 2011 upcoming events may propel it to new 52-week highs in the blink of an eye. Here is a 20-year old biotech company with stable annual sales that cover all the overhead, two diagnostic drugs in phase 3 clinical trials about to see completion with new drug applications, and target potential sales of $3 billion and $450 million respectively. Given that the current market cap is hovering around $177 million, this would represent a significant opportunity for new and current shareholders going forward. Due to this, it is not surprising that TriPoint Global Research rated the stock a ‘Market Outperform' and gave it a price target of $5.00, which was quickly followed up by WBB Securities recently upgrading the stock to a target of $6.00, representing more than a 100% gain from current levels.
FDA Catalyst Companies Have Been Red Hot
Neoprobe is highly expected to gain momentum on the back of its catalysts, especially when comparing it to other companies undergoing similar circumstances:
- DepoMed (NASDAQ:DEPO) gained a whopping 143% during the last six months after Pfizer stated it would not file patent infringement lawsuit on its lead blockbuster drug, DM-1796. The company is seeking approval for the treatment of pain associated with post-herpetic neuralgia (PHN) following singles with an estimated review date of 1/30/11.
- CorCept Therapeutics (NASDAQ:CORT) appreciated 49% during the last 12 months on the back of the company's expectations to file an NDA with the FDA by the end of the first quarter in 2011 for its lead product, CORLUX, for the treatment of Cushing's Syndrome.
- Amarin Corporation (NASDAQ:AMRN) is by far the heavyweight winner in this category, having its share price rocket a staggering 600% during the last 12 months. These gains are primarly due to its product blockbuster lead product, AMR101 receiving highly positive clinial phase 3 results to support a potential NDA filing in 2011.
Application For Listing On The AMEX
First and foremost, when analyzing Neoprobe, it is important to note that they are doing something many small cap over-the-counter companies never do — applying in order to be listed on the NYSE:AMEX major exchange. On August 3rd, the company, along with President and CEO, Mr. Bupp made this development official and issued the following statement, "A potential listing on NYSE: AMEX would serve as a positive milestone for our Company and would enhance shareholder value.