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Richmond Hill, Ontario, Canada, 2010/04/05 - Investment Report on Prospective Pharmaceutical Company: Telik, Inc. (NASDAQ: TELK). Overview of Market Trend in Healthcare Sector, comparison with other Drug Manufacturers’ price performance, fundamental and brief chart analysis - TimelessWealth.net.
While Biotech Stocks have traditionally provided returns in leaps and bounds, Cancer Drug Manufacturers have recreated a 'Cinderella' story turning modest investments into retirement funds. Just three months ago, Somaxon Pharmaceuticals was trading for less than $1.00/share, capitalized under $30M. Since then it has boasted a 759% jump in price, leaving speculators hungry for other opportunities and another shot at financial bliss.
In fact, as we put together this report for our Newsletter Subscribers, it took our Staff less than 10 minutes to track down several Cancer Drug Manufacturers that have soared in the marketplace this year.
Nevertheless, the question remains: How do we capitalize in the Market knowing what we know?
All seven stocks listed (above) were small, Cancer Drug Manufacturers trading under Wall Street and Main Street's radar. That tells us the next Biotech Mover is a Micro Cap Company that trades relatively small or 'quiet' volume...at least at this point in time.
Enter Telik Inc. (NASDAQ: TELK), a clinical stage drug development company, focused on discovering and developing small molecule drugs to treat cancer. While analysts will bore investors with intricate detail, we will keep our report concise and give you three reasons why Telik, Inc. (NASDAQ: TELK) is an exciting Biotech Play:
(1) -TIMING- "The key is to find undervalued cancer drug makers that pose nominal downside risk but retain potential for serious growth", writes SeekingAlpha columnist Justin M. Hall, in an article on the hot trend among 'Cancer Drug Makers'. Telik, Inc. is trading at a 38% discount to its 52-week high ($1.40), a mark that could provide investors with a 61% return from the recent price per share ($0.87). Telik continues to be encouraged by long-term supporting levels just below as the price looks to break resistance for the fifth time in 10 months.
(2) -RISK MANAGEMENT- One of the greater risks involving an investment in development-stage biotech companies is the necessity for Companies to raise capital to fund operations. That hurts the share price, and consequently, shareholders. Reiterating Telik's 2010 Guidance, "The Company’s cash utilization for the full year 2010 is expected to be in the range of $18.0 million to $20.0 million". With roughly $40M in cash, the company is well positioned to cover expenses without having to resort to stock offerings to raise capital. Investors have a high chance of evading this risk in Telik, Inc.
(3) -POSITIONING- There is something oddly convincing about a Company where 56% ownership belongs to Institutional Investors. When the likes of MORGAN STANLEY, EASTBOURNE CAPITAL MANAGEMENT LLC, and OPPENHEIMER FUNDS, INC. have a combined vested interest of $19M in Telik, Inc. that tells retail investors there is something going on 'behind the scenes'. Whether that ‘something' is a FDA approval of a Drug, a lucrative buy-out or 'takeover', only time will reveal. Meanwhile, 'free trading' shares less institutional holdings, results in a float under 23M shares. That attracts speculators.
Telik's Drug Pipeline includes development candidate TELINTRA® (TLK199) which is currently in Phase 2 clinical development for myelodysplastic syndrome, and severe chronic idiopathic neutropenia. TELINTRA® is also being evaluated for the treatment of additional blood disorders. Another product candidate, TELCYTA® (TLK286), is a cancer cell-activated chemotherapeutic that has shown clinical activity in Phase 2 and Phase 3 clinical trials in advanced ovarian cancer, non-small cell lung cancer, colon cancer and breast cancer.