Among the biggest winners in Wednesday's early trading are Neurocrine Biosciences (Nasdaq: NBIX) and Ener1 (NYSE: HEV).| Top Percentage Gainers -- Wednesday, June 16, 2010 | ||||
| Company Name (Ticker) | Intra-Day Price | Intra-Day % Gain | 52-Week High | 52-Week Low |
| Neurocrine Biosciences (Nasdaq: NBIX) | $5.37 | +14.7% | $5.60 | $1.94 |
| Energ1 (NYSE: HEV) | $3.66 | +7.2% | $7.90 | $2.75 |
*Table includes companies with minimum market capitalizations of $200 million and three month trading volumes of at least 100,000 shares. All percentage returns are listed as of 11:00AM Eastern Standard Time. Click on ticker symbols for up-to-the-minute price quotes and percentage gain data. | ||||
A Key Endorsement
Small biotech firms have two goals: prove that their drugs are effective and safe, and find a large partner to help bring the drugs to market. Neurocrine Biosciences (Nasdaq: NBIX) has met both of those goals in just three weeks. We told you on May 25 that the company’s drug that boosts fertility of otherwise infertile women showed very strong results in Phase II clinical testing. We concluded our assessment by noting that, “A large partnership agreement stands as the next near-term catalyst. Shares should be bought in advance of such an agreement.”
That window has just closed. Abbott Labs (NYSE: ABT) has announced a wide-ranging partnership that will net Neurocrine $75 million now, and up to $500 million more down the road. Neurocrine still must complete Phase III trials, which is often the hardest hurdle to pass. But if successful, this drug should find a fairly large potential market, as no competing approaches exist. The Abbott imprimatur is pushing shares up +10% today.
Action to Take --> The near-term gains have been made in the stock, and you couldn’t be faulted for taking profits if you followed our advice. As time passes, shares may pull back in the face of market weakness, which would create a better entry point.
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Good Call, Bad Timing
In late May, we suggested that investors had been too harsh in dumping shares of advanced battery makers A123 Systems (Nasdaq: AONE) and Ener1 (NYSE: HEV).
Shares slumped further from there, but have bounced back nicely this week. Shares of Ener1 are up nearly +5% to $3.60 on Wednesday after a +12% gain on Tuesday. Analysts at Needham & Co. initiated coverage of the stock on Monday with a $6 price target, noting that “the company is positioned to become a major supplier of lithium-ion (li-ion) battery systems into a growing passenger vehicle market.”
Ener1 already has key relationships with Norwegian electric car maker THINK, Volvo and China’s largest battery manufacturer. As production volumes ramp up to support those relationships, Needham’s Michael Lew thinks other auto makers will sign on as customers as well.
Action to Take --> These stocks have taken quite a drubbing and remain close to their 52-week lows. Their outlooks are quite bright, and if you stay focused on the long-term, you may see considerable upside as the electric and hybrid car markets take off.
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