Catalyst Pharmaceuticals inc ( NASDAQ: CPRX ),stock moved up more than 19 % without specific news. Volumes are much higher than average. Stock touched a new 52 week high of $ 1.57, it might be a break out based on some developing news. Good play for Intraday trade.
Our Call : Buy positions might be initiated and might stay long for couple of days, or more depending on risk appetite.
Company analysis and report:
Company might be a takeover target and also offers a value buy as stock has much upside left below is some analysts price targets on the stock First Albany had a $10 price target, while Stifel Nicolaus and Rodman and Renshaw both had $9 price targets with buy ratings. The buy ratings and $9 to $10 price targets were just before the financial crisis, and it seems like everyone has forgotten about this little biotech that clearly still has potential and has made significant progress over the past four years. One analyst still has a $9 price target,
CPRX has a very low burn rate compared to most biotechs; management has been conservative and made substantial purchases of this stock. The 52-week high is $1.54 and with volume picking up and the shares only about 30 cents away from that level, it looks like these shares could be ready to make new highs soon. The chart for this stock looks good as well, with the 50-day moving above the 200-day moving average, the chart shows a new golden cross formation, which often indicates the start of a new upward trend.
Catalyst has some big players invested in its stock. Federated Investors owns nearly 12% of this company and FMR, LLC (Fidelity) owns about 6%. Late last year, Catalyst began a $10 million clinical trial, the majority of which (about $7.2 million) is being paid by the government. The trial is for CPP-109, "Vigabatrin," to treat cocaine addiction. The company also has CP-115, which it says "has the potential to address a broad range of diseases affecting the central nervous system beyond addiction, such as adult epilepsy and infantile spasms." What intrigues me most about this is the following portion:
In 2010, Reckitt Benckiser's Suboxone(R) and Subutex(R) became the first addiction drugs to achieve "blockbuster" status with combined U.S. sales of over $1 billion. Recognition of this milestone, along with the looming "patent cliff" faced by the world's largest pharmaceutical companies, has increased the number of companies interested in discussions about partnering opportunities for CPP-109 and CPP-115. While no definitive partnering agreements have been entered into to date, Catalyst's goal is to make significant progress on this front before the end of 2011.
An agreement to partner with a major pharmaceutical company would potentially send this stock soaring from current levels. CPP-109 has been granted fast track status by the FDA for the treatment of cocaine addiction, which indicates that the FDA has recognized that CPP-109 is intended for the treatment of a serious or life-threatening condition for which there is no effective treatment and which demonstrates the potential to address unmet medical needs. With a market cap of only about $24 million and the potential to bring a blockbuster drug to market, it would not be surprising to see a major company takeover CPRX or announce a major partnership agreement, which is one of the company goals for 2011.
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