Biotechs Breaking Out

Here are four biotech stocks breaking out on positive developments related to their drugs.

bluebird bio, Inc. (BLUE) has popped about 20 points in a week to Wednesday’s close of $92.80.  On Wednesday alone, it rose $5.15 on over 1 million shares traded, closing just a dime off the high. The company announced publication of a case study on the first patient with severe sickle cell disease treated with its gene therapy product.  The stock has far surpassed our initial target of $85 and is closing in on the next target of $95. There’s a possibility it may run up to the $106-7 range, last reached in October 2015, which is the new, near-term target. Short interest of 12.9 times its average volume could fuel the move as shorts cover on an advance.

Esperion Therapeutics, Inc. (ESPR) followed through for another $4.23 to $30.44 Wednesday on 2.2 million shares.  Just a month ago, the stock was under $11, but investors appear to be hopeful that the biotech company’s lead drug for treating high cholesterol is more likely to win approval under President Trump.  The stock is a little long in the tooth short-term and may need to rest and pullback before its next move.  However, after the stock dropped from a high of nearly $119 in March 2015 to under $10 in late June 2016, it based for 7 months, and has now broken well out of that base and is looking higher.

Amicus Therapeutics, Inc. (FOLD) surged 17% on Wednesday, up $1.11 to $7.60 on 12.2 million shares, about 3 1/2 times its average volume.  The company CEO’s daughter, Megan Crowley, who has Pompe disease, was highlighted during President Trump’s address to Congress Tuesday night.  The biotech company also announced fourth-quarter earnings, highlighting the international launch of its first commercial product for treating rare and orphan diseases.  Wednesday’s surge broke the stock out of a mini-consolidation pattern and across lateral resistance from its December high.  Watch for a move next to $8.25, with a secondary target of $9.50.

Kite Pharma, Inc. (KITE) also had a monster day on Wednesday, up $8.85, or 12 1/2%, to $79.62, on 6.9 million shares traded. The stock was up 25% the previous session after the company released a favorable earnings report and positive clinical data on its lead product candidate for treating patients with rare forms of blood cancer.  Next target is $85, and short interest of 14 times its average volume could accelerate the advance..

See Harry’s video chart analysis on these stocks.