Cell Therapeutics (CTIC): Shares of Cell Therapeutics are up well over 800% since the start of the year, as rumors surrounding its only drug ‘Pixantrone’ a phase III trial drug for the treatment of non-Hodgkin’s lymphoma bubble up of a possible positive FDA ruling shortly. However, rumors are just that rumors and should be taken with a total grain of salt when it comes to money losing biotech stocks. Looking back on the history of Cell Therapeutics, one seriously has to question the competence of its current management. Shares of CTIC peaked roughly in October 2000 at $2,900 per share---where then it was trading in the $350 per share range by late 2004 and is now trading in the $1 range. The company has blown over $1.2 billion dollars since the late 1990s and hardly has much to show in terms of commercial or even experimental drugs on the market. In fact, given CTIC has about $150 million dollars in debt due this year management was forced to offer a toxic conversion to its debt holders, where debt holders would receive common equity in return for stock. This debt to equity conversion almost always is toxic to current shareholders no matter what the industry. Recently Cell Therapeutics announced that ‘Pixantrone’ is now available on a named-patient basis in Europe. Despite its shaky rather fundamentals, Cell Therapeutics has the ability to still move higher. In fact shares of CTIC are currently up 29.57% in mid-afternoon trading.

Vanda Pharmaceuticals (VNDA): Shares of Vanda rallied almost 700% in a single trade session on news that the FDA approved the company’s ‘Fanapt’ drug for schizophrenia late Wednesday night. What makes this story even more dynamic is that just in July the FDA agency declined to approve ‘Fanapt’, asking the company to compare its clinical trial results to other schizophrenia treatments including Johnson & Johnsons (JNJ) ‘Risperdal’ and Pfizer ‘Geodon’. At this time it was widely regarding that the cash strapped company would simply shut-down and liquidate its assets to its current shareholders. Clearly the FDA had a change of heart, with several analysts calling this the biggest surprising move out of the FDA in decades. Shares of Vanda Pharmaceuticals are currently up 24.50% in mid-afternoon trading

OSI Pharmaceuticals (OSIP) Rumors have heated up surrounding OSI Pharma and a potential buyout offer from GlaxoSmithKline (GSK) to the tune of $50 per share or so. The company has several drugs either in phase II or phase III testing for ovarian, colorectal, and pancreatic cancer, as well as several drugs in the diabetes and obesity markets as well. GlaxoSmithKline and OSI have jointed before through various research projects and assignments over the years. OSI Pharma is a long pick for the week.

BioCryst Pharmaceuticals (BCRX): Frankly if you are able to find shares of BioCryst Pharmaceuticals to short north of $4 per-share do so! BioCryst Pharmaceutical is as speculative of a biotech stock as one can get. It shares are up about 150% year-to-day solely on H1N1 swine flu concerns. What makes BioCryst such an interesting case is that the company’s CEO John Stonehouse publicly said that the company will not benefit from the H1N1 outbreak. In an interview given to Reuters, Stonehouse said “We're in clinical trials right now and not on the market” < http://www.reuters.com/article/marketsNews/idAFN2425534220090424?rpc=44> BioCryst is currently in phase I testing of several key drugs regarding viral infections, and cardiovascular diseases which is where the link to the swine flu is made. However, Phase I trials are considered elementary clinical tests, which normally take 1-2 years and tons of capital to complete. Moreover, additional tests in phase II and phase III testing is required even before an FDA submission is allowed. Thus, this has lead to the belief by many investors and analysts that ultimately the FDA will not give BioCryst authorization power to produce their drugs in an emergency fashion to combat the H1N1 flu.

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