Out Fox The $treet

After reporting Q3 earnings, Savient Pharma (SVNT) plummeted back to $1 from the meteoric rise to nearly $3 during September. The stock has been stuck around that $1 level for the last two months. Will the new EU approval for KRYSTEXXA finally unleash the stock? The company is a specialty biopharmaceutical company focused on developing and commercializing KRYSTEXXA (pegloticase) for the treatment of chronic gout in adult patients refractory to conventional therapy. As written in previous articles (see here), the company was able to complete a restructuring that provided time to build the revenue base in the US. While all of those moves left the company better equipped to survive long enough for the promising new drug to thrive, Savient has yet to prove to the market that the drug will ever meet the original estimates. Will the lowered cost structure even be sufficient enough to survive? Read the full article at Seeking Alpha. Disclosure: Long SVNT. Read the disclaimer page f...

After reporting Q3 earnings, Savient Pharma (SVNT) plummeted back to a $1 from the meteoric rise to nearly $3 during the quarter. The company reported disappointing sales numbers for the promising gout drug and failed to break out one-time costs to provide investors a clearer picture of the 2013 earnings view. As written in a previous article, Savient Pharma: The Pharma Rising From The Dead, the company was able to complete a restructuring that provided time to build the revenue base. While all of those moves left the company better equipped to survive long enough for the promising new drug to thrive, Savient has yet to prove to the market that the drug will ever meet the original estimates. Will the lowered cost structure even be sufficient enough to survive? The company is a specialty biopharmaceutical company focused on developing and commercializing KRYSTEXXA (pegloticase) for the treatment of chronic gout in adult patients refractory to conventional therapy. Read the full artic...

The drama for OCZ Technology Group Inc (OCZ) just won't end. The manufacturer of solid state drives has gone through a series of dramatic announcements in recent months from missing earnings due to a NAND shortfall, the retirement of the CFO, the resignation of the CEO, and now an earnings warning and reporting delay. Not to forget that the company hired a new CEO, existing board member Ralph Schmitt. After announcing materially lower revenue expectations, Ralph hosted a conference call that was short on details and long on questions. Due to the lack of firm details, the stock is currently untouchable by investors. Read the full article at Seeking Alpha. Disclosure: Long SVNT. Please review the disclaimer page for more details.

Over the last year, Savient Pharma (SVNT) has undergone a disappointing sales launch of a promising drug, the hiring and defection to Dendreon (DNDN) of a big name CEO, and finally the lawsuit of a creditor for forced liquidation. Somehow during all of these crazy actions, the company was able to get the lawsuit dismissed, raise cash, and greatly right size the sales force to account for the slower launch of the new drug, KRYSTEXXA. All of these moves have left the company better equipped to survive long enough for the promising drug to thrive. The company is a specialty biopharmaceutical focused on developing and commercializing KRYSTEXXA (pegloticase) for the treatment of chronic gout in adult patients refractory to conventional therapy. Read the full article at Seeking Alpha. Disclosure: Long SVNT. Please review the disclaimer page for more details. 

This model gained a solid 21.4% in February versus 4.1% for the benchmark S&P 500. This model typical outpaces the major indices by a large margin in up periods and last month was no exception. Since the end of 2011, this model has been running on the theme that the majority of stocks would retrace the losses experienced since the July 2011 levels. In essence, our theory all along has been any losses since that time period were from irrational fear of a second financial collapse that the Europeans were unlikely to allow. Naturally this fluctuates on a case by case basis where any individual stock could move a lot higher or lower depending on circumstances since then. This conviction has allowed us to hold onto a highly leveraged portfolio and see significant gains this year as stocks like Apple (AAPL) , Dicks Sporting Goods (DKS) , Liz Claiborne (LIZ) , and Radware (RDWR) all reached those July levels by February. Other stocks like Manitowoc (MTW), Sears Hold...

After a bad 2011, this year got off to a fantastic start with the model seeing a 25% gain in January easily outperforming the 4.4% gain for the S&P500. The model spent most of the month accumulating cheap stocks in order to take advantage of the market rallying against the proverbial 'wall of worry'. January was an interesting month with stocks rising even in the face of what appeared like continued negative news out of Europe. With the continued focus on Greece, most investors stayed out of the stock market and missed that yields on Italian and Spanish bonds saw dramatic declines. The ability to isolate the problems to Greece and Portugal to a lessor extent were a big relief to a market pricing in a European blowup in December. In addition, the decline in emerging markets inflation was a big benefit to the under performing stock class in the new year. Specifically fast growing countries like China and India saw multi year lows in inflation rates allowing monetary polic...

Effective January 1st, KRYSTEXXA was assigned permanent J-code J2507 by the Centers for Medicare and Medicaid Services (CMS). This code allows healthcare providers an easier and quicker method for getting reimbursed for KRYSTEXXA infusions. While already known that KRYSTEXXA would get the permanent code on January 1st, confirmation is always good. Saivent Pharma (SVNT) had a horrible 2011 due to slow sales from this new drug approved for treatment for refractory chronic gout (RCG). The J code will undoubtedly help. By all accounts, the new drug works and the only issue has been working out the reimbursement process. Considering the time it takes to work through the system, SVNT doesn't expect a major impact until Q2. At just $2.4 and with a market cap around $170M, SVNT has become an extremely cheap stock if this J code solves all the issues with sales. It seems bizarre that this would solve the problems, but it is an expensive drug. Via SVNT PR: product-specific billing...

October was an exceptional month with a 47.9% gain versus the 10.8% gain for the benchmark leading to a 37.1% outperformance. Unfortunately, this was only a small recovery from the July, August and September selloff. With many stocks in the model still trading far below the July highs, substantial upside remains just to recapture those levels. Though global GDP growth came under pressure during the summer and fall months, US corporations are reporting record profits. The yield curve remains very positive suggesting an attractive environment exists for equities. On a daily basis, it's becoming more apparent that the summer swoon was more of investor panic than a economic reason suggesting a return to even the April and May highs of 1,370 on the S&P 500 is probably warranted. China remains a key focus of the model. While investments in China based stocks have been greatly reduced, the model still relies heavily on the demand for materials and construction related items coming...

Great list of the most heavily shorted stocks by Bespoke Investment. Amazed to see that 3 stocks in our Opportunistic models appear on this list. Sears Holdings (SHLD), Savient Pharma (SVNT), and Liz Claiborne (LIZ) all have roughly 30% of the outstanding float short. Hopefully one day these short levels will lead to a massive short squeeze. SHLD continues to buy back stock meaning that the float will continue to shrink likely leading to higher and higher percentages. What the shorts don't seem to understand is that SHLD while a troubled retail operation has a ton of valuable assets and a solid balance sheet. The short story just doesn't add up. SVNT on the other hand just raised $100M plus to fund the sales rollout of FDA approved KRYSTEXXA that helps patients with extreme gout problems not solved by existing drugs. Shorters appear willing to bet that a slow sales start is because the drug lacks a market rather than the initial lack of a sales team. With the cash in hand,...

Savient Pharma ( SVNT ) - a small cap biotech trading 50% below the 52 week high with an approved FDA drug with blockbuster potential - provides an ideal risk/reward scenario. The approved drug also has orphan status, giving it a 7 year marketing exclusivity. Naturally, the stock wouldn't still fall into the small cap arena if everybody agreed on the blockbuster potential of Kyrstexxa. The drug is one of the first for gout in over 40 years and provides treatment of chronic gout in adult patients refractory to conventional therapy. It treats an previously untreatable disease, providing for a under-served patient base. This is why many analysts and investors are high on SVNT and the blockbuster potential of the drug. Read the whole story at Seeking Alpha . 

Our philosophy isn't to pick stocks based on ones potential for a buyout, but this theStreet.com report caught our attention. Harry Rady of Rady Asset Management owned biotech company Cephalon (CEPH) that recently got a buyout offer from Valient International (VRX). Since Stone Fox Capital also owned CEPH in our Opportunistic folios it was intriguing to see what else he picks, since we might have similar investment styles. Looking over his list we actually already own one of his top picks in Savient Pharma (SVNT). He also lists Activision Blizzard (ATVI) and NuVasive (NUVA) that have been on our radar. Might be time to double up research on these picks. Rady sees 100% gains in both SVNT and NUVA and interesting that they are both in the medical/health sector like CEPH. SVNT has been a long term holding that we've ridden to the $20s only to see it crash back below $10 when the sale of the company failed. With the new management team in place, they appear to be the stronges...

Today Savient Pharma (SVNT) announced the initial shipment to specialty distributors and pricing of KRYSTEXXA. These are two major milestones for a biotech stock basically left for dead by the market after a failed auction process back in late October. Now the key will be how many vials of KRYSTEXXA at $2,300 a pop SVNT will be able to sell with a limited salesforce. Considering they had thousands of people wanting sign up for trials and those people are desperate for the drug the sell shouldn't be that hard. If you have been suffering from gout without any relief from existing drugs, this product should be able to sell itself. The stock has been flat since the initial selloff. It is currently hanging out in the low $12s and offers substantial upside as the negative analyst community finally clues in that management is more then capable to go it alone having gotten the drug to market by Dec 1st nearly a month after announcing the failed auction process and a little over 2 mont...

Company refused to provide information on the failed buyout process so investors are left guessing the interest level. On one hand, its understandable that management doesn't want to discuss details in order to not hurt their hand in future discussions. On the other hand though, they need to do something better to support the stock price and shareholders. They should provide some expectations on sales price since they apparently aren't willing to sale to the highest bidder. They're leaving too much open for interpretation and the market has spoken that its not acceptable. Having said that, I was pleased to hear the company has made a lot of progress towards the launch of KRYSTEXXA. They already have the initial product labeled and ready. Marketing materials are waiting for approval from the FDA. One of the largest private payers has already agreed to include it as a reimbursable cost without knowing price. They also expect limited costs to develop the infrastructure neede...

Savinet Pharma (SVNT) might be one of today's biggest losers, but it could be tomorrow's biggest gainer. SVNT announced that they have been unable to find a buyer at a suitable price for the company. The stock initially dropped over 50% to a 52 week low on the announcement. Was the move warranted? Regardless of whether SVNT is bought out, the company still owns an orphan drug, KRYSTEXXA, recently approved by the FDA for the treatment of severe gout cases where no other option exists. The intrinsic value of the company hasn't changed because they couldn't find a deal for an agreeable price. The only change is the value an investor can expect to receive in the short term. With the drop in price, I'm sure a significant amount of companies have called seeing if management would drop there price to a level likely very attractive with the stock currently trading in the $12s around midday. SVNT could be tomorrow's biggest gainer. While the news is disappointing t...

Our Opportunistic and Growth portfolios aim to capture excess returns, but not without some diversification. Limiting portfolio sizes to 20-30 stocks allows for diversification without getting to levels of diworstification. Hence, the portfolios have always had a few 'risky' biotech stocks. Based on the results of Savient Pharma (SVNT) the rewards have clearly outweighed the risks. See previous post. Oh why didn't I include SVNT in the Opportunistic Portfolio???? Regardless the Growth Portfolio has seen some nice out performance demand on the back of SVNT being up 33%. Also noticed that the other biotechs in those portfolios have been perking up of late. All 3 stocks have seemed alot cheaper then the risk involved. Rigel Pharma (RIGL) and Cephalon (CEPH) have seen bullish trading of late. Not being predisposed to investing in this sector, we just found the valuations too compelling. RIGL is a clinical-stage drug development company that discovers and develops novel, sm...

After Hours, the FDA finally approved the gout drug Krystexxa in what seemed like an eternity. Savient Pharma (SVNT) had originally gotten an FDA Panel recommendation by the count of 14-1 way back in , but final FDA approval was delayed in August 2009 principally due to manufacturing issues. Gout is a common type of arthritis in which deposits of uric acid build up around joints, causing pain, swelling and stiffness.Considering the general lack of modern drugs for gout it has been generally accepted that this drug would have little issue in being put to use by doctors. There is a huge market waiting on the approval of this drug. Though it seemed apparent that the drug would be approved today the stock has languished in the $15 range for months. It last traded up 20% to around $18 after hours. SVNT is a 2.7% position in the Growth Portfolio so Stone Fox has a keen issue in following the trading tomorrow.. Below are some details from analysts regarding buyout prices. Remember the c...

Savient Pharma (SVNT) has been one of our favorite biotechs this year. They are on the verge of drug approval for a gout drug that will have no competition and solves a problem that has had no cure for a long time. The stock has been weak after the FDA decided to not approve their drug after positive P3 trials due to a manufacturing issue. Its just about a no brainer for approval in that their drug provides a much needed cure regardless of some possible side effects. Collins Stewart upgrades them on these facts. Including that a larger firm could come in and quickly wrap up the manufacturing issue and some other minor issues. The stock traded at just $14 prior to this upgrade today and continues to be an amazing bargain at these levels. Savient Pharma: Collins Stewart believes SVNT is de-risked and attractive for any rheumatology company; tgt raised to $25 (14.21) Collins Stewart raises their tgt to $25 from $21. Firm expects a Krystexxa approval for treatment-failure gout given the ad...

Savient Pharma (SVNT) has been in the Growth Portfolio for several months after it and other small biotechs like Rigel Pharma (RIGL) didn't surge with the soaring market in March. Luckily both have been hot in June. SVNT had a positive note from the FDA today. See this AP note . SVNT has the drug Krystexxa up for FDA panel review on Tuesday. Analysts have been very divided on the approval of this drug as it clearly helps treat gout, but fears exist over the potential severe side effects. The biggest support for Krystexxa is that the population largely impacted by gout typically has severe medical issues beyond the gout problem so it isn't all that surprising to have patients see these cardiac issues whether they take the drug or not. The FDA note seems to signal that the benefits of this drug out weigh the side effects. Logically they'd get approval with some sort of label warning so it has been perplexing that several analysts had such negative comments such as the stock d...