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12:00 AM
Oct 05, 2009
 |  BioCentury  |  Finance

4th Quarter Stock Preview: Hitting more Milestones

Buysiders are watching for more fast-rising small caps, hoping to see more gains on clinical and regulatory milestones as has happened many times already this year.

They will have many potential shots on goal: beyond important clinical milestones, FDA action is expected on no fewer than 27 applications from biotech and pharma companies alone (see 4Q09 Milestones, A9).

Oliver Marti of Columbus Circle Investors named two biotechs he thought had the potential for big pops this quarter: small mid-cap XenoPort Inc. and small cap Poniard Pharmaceuticals Inc.

XenoPort's Solzira gabapentin enacarbil has a Nov. 9 PDUFA date; it is under FDA review to treat moderate to severe primary restless legs syndrome (RLS). In September, Solzira also had positive results in a Phase IIb study to treat neuropathic pain associated with post-herpetic neuralgia (PHN) (see BioCentury, Sept. 21).

GlaxoSmithKline plc has rights to Solzira outside of certain Asian countries, where Astellas has rights.

"If XenoPort's Solzira for restless leg gets approved, it could look similar to Human Genome Sciences," said Marti. "They have a strong partnership with GlaxoSmithKline across a number of indications; we could see discussion of a takeout by GSK."

International Biotechnology Trust plc's David Pinniger also is watching Poniard. "We will be keeping an eye out for the picoplatin Phase III SPEAR data in SCLC, which is expected next quarter," he said. The company is slated to report preliminary Phase III data for IV picoplatin (NX 473) to treat small cell lung cancer next quarter.

"I'm not 100% convinced it will be successful, but if it is, the stock will be up 100%," said Marti.

Two small caps mentioned by buysiders were longer-term picks:

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