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The market reacted negatively to speculation surrounding the likely retention of the alternate minimum tax (AMT) in the amended tax reform bill passed by the Senate, last Saturday. The latest draft awaits finalization by a conference committee of House and Senate members.
The inclusion of AMT in the final bill will weigh on corporate earnings as companies will have to pay tax on reinvested and deferred cash earnings. It is believed that tax reforms — which aim to lower the corporate tax rate to stimulate economic as well as employment growth — will not prove beneficial to large-cap entities.
However, the proposed tax reforms, if approved, will leave more cash in the hands of drugs/biotech companies. The cash can be invested for mergers/acquisitions, which have been relatively fewer this year compared with the last. It goes without saying that significant uncertainty regarding the timely passing of the U.S. tax reform has cast a pall on the future of the biotech sector.
In fact, the drugs/biotech space, which picked up this year after the 2016 debacle, has been witnessing a correction since October. The sector has lost 5.6% so far in the fourth quarter (Oct 1 to date). A major factor that resulted in this correction is the uncertainty surrounding the passing of the tax reform.
The drugs/biotech market has witnessed a decline of 1.6% so far this week due to the broader market pressure. The S&P 500 is down 0.1% in the same time frame.
Although the market and the drugs/biotech sector are down this week, there are still quite a few hidden biotech treasures that have witnessed a significant upside.
3 Stocks on the Rise
Here are three stocks that have gained this week. These have excellent prospects and can prove to be good bets going forward.
Revance is a California-based biotechnology company that has soared 18.4% so far this week. The increase was supported by positive top-line results from two pivotal phase III studies evaluating Revance’s next-generation neuromodulator, RT002 (daxibotulinumtoxin), for reducing wrinkles between the brows (glabellar lines).
Data from the study showed that RT002 achieved substantial reduction in severity of glabellar lines for a long-acting duration of six months. Notably, the time taken by RT002 in treating glabellar lines is better than the currently marketed neuromodulators including Allergan’s Botox.
Sucampo Pharmaceuticals, Inc.
Shares of Rockville, MD-based Sucampo have risen 21.8% so far this week. Rumors of a takeover probably pushed its share price up this week. Sucampo’s shares have been rising over the last couple of months backed by several positive developments.
In late September, Sucampo announced that a supplemental New Drug Application (sNDA) for the company’s marketed drug, Amitiza has been accepted and granted priority review by the FDA. It is currently approved for chronic idiopathic constipation (CIC) in adults, irritable bowel syndrome with constipation (IBS-C) among adult women and opioid-induced constipation (OIC) in patients with chronic non-cancer pain.
The company is looking to get the drug’s label expanded to include children aged 6 to 17 years with pediatric functional constipation. A decision is expected on Jan 28, 2018. Moreover, strong earnings in the third quarter coupled with increased earnings and revenue guidance for 2017 led to the consistent rise of the stock.
VistaGen is a California-based biopharmaceutical company. Shares of the company have surged 150.7% so far this week. The increase in share price was driven by a patent granted by U.S. Patent and Trademark Office (USPTO) to its mid-stage candidate, AV-101, regarding its method of production.
The candidate is currently being evaluated for the treatment of major depressive disorder (MDD). Notably, in early November, VistaGen announced that AV-101 has been granted a European patent.
The patent granted in the United States and the EU strengthens the company’s strategy for intellectual property.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
3 Drug/Biotech Stocks Up More Than 10% This Week
The market reacted negatively to speculation surrounding the likely retention of the alternate minimum tax (AMT) in the amended tax reform bill passed by the Senate, last Saturday. The latest draft awaits finalization by a conference committee of House and Senate members.
The inclusion of AMT in the final bill will weigh on corporate earnings as companies will have to pay tax on reinvested and deferred cash earnings. It is believed that tax reforms — which aim to lower the corporate tax rate to stimulate economic as well as employment growth — will not prove beneficial to large-cap entities.
However, the proposed tax reforms, if approved, will leave more cash in the hands of drugs/biotech companies. The cash can be invested for mergers/acquisitions, which have been relatively fewer this year compared with the last. It goes without saying that significant uncertainty regarding the timely passing of the U.S. tax reform has cast a pall on the future of the biotech sector.
In fact, the drugs/biotech space, which picked up this year after the 2016 debacle, has been witnessing a correction since October. The sector has lost 5.6% so far in the fourth quarter (Oct 1 to date). A major factor that resulted in this correction is the uncertainty surrounding the passing of the tax reform.
The drugs/biotech market has witnessed a decline of 1.6% so far this week due to the broader market pressure. The S&P 500 is down 0.1% in the same time frame.
Although the market and the drugs/biotech sector are down this week, there are still quite a few hidden biotech treasures that have witnessed a significant upside.
3 Stocks on the Rise
Here are three stocks that have gained this week. These have excellent prospects and can prove to be good bets going forward.
Revance Therapeutics, Inc. (RVNC - Free Report)
Revance is a California-based biotechnology company that has soared 18.4% so far this week. The increase was supported by positive top-line results from two pivotal phase III studies evaluating Revance’s next-generation neuromodulator, RT002 (daxibotulinumtoxin), for reducing wrinkles between the brows (glabellar lines).
Data from the study showed that RT002 achieved substantial reduction in severity of glabellar lines for a long-acting duration of six months. Notably, the time taken by RT002 in treating glabellar lines is better than the currently marketed neuromodulators including Allergan’s Botox.
Sucampo Pharmaceuticals, Inc.
Shares of Rockville, MD-based Sucampo have risen 21.8% so far this week. Rumors of a takeover probably pushed its share price up this week. Sucampo’s shares have been rising over the last couple of months backed by several positive developments.
In late September, Sucampo announced that a supplemental New Drug Application (sNDA) for the company’s marketed drug, Amitiza has been accepted and granted priority review by the FDA. It is currently approved for chronic idiopathic constipation (CIC) in adults, irritable bowel syndrome with constipation (IBS-C) among adult women and opioid-induced constipation (OIC) in patients with chronic non-cancer pain.
The company is looking to get the drug’s label expanded to include children aged 6 to 17 years with pediatric functional constipation. A decision is expected on Jan 28, 2018. Moreover, strong earnings in the third quarter coupled with increased earnings and revenue guidance for 2017 led to the consistent rise of the stock.
VistaGen Therapeutics, Inc. (VTGN - Free Report)
VistaGen is a California-based biopharmaceutical company. Shares of the company have surged 150.7% so far this week. The increase in share price was driven by a patent granted by U.S. Patent and Trademark Office (USPTO) to its mid-stage candidate, AV-101, regarding its method of production.
The candidate is currently being evaluated for the treatment of major depressive disorder (MDD). Notably, in early November, VistaGen announced that AV-101 has been granted a European patent.
The patent granted in the United States and the EU strengthens the company’s strategy for intellectual property.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>