Chris Lau
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Chris Lau in Value Stocks,

​Two Biotech Stocks Dip to Value, One to Avoid

Biotech stocks are notoriously risky. The share price depends on sentiment, FDA results, and the company’s balance sheet. After indicating it would not face any delays in an NDA filing for KIT-302, Kitov (KTOV) shot higher to over $6 last month.

Profit taking hammered the stock. Kitov closed recently below $4.60. The company ended last year with $12M in cash, but filed on May 20 an SEC F-1. The company will sell shares and warrants to raise $5M.

Kitov’s stock price will appreciate as it gets closer to commercialization. It will need more cash, but may find a partner or get acquired outright.

Horizon Pharma (HZNP) rebounded from $14 to $18 after reporting an 81% Y/Y increase in revenue on May 9 for its first quarter. For the second quarter, expect a revenue beat based on strong RX numbers. Primary care numbers are up over 5 percent. Sales for RAVICTIare still strong. New patient growth last quarter for ACTIMMUNEshould continue in this quarter.

One biotech stock that investors should avoid is TransEnterix (TRXC). Worth just $165M and closing with a share price at $1.45, the company’s future is in trouble. In April, the FDA rejected the company’s SurgiBot application. Rising uncertainties mean TRXC will drift lower or move nowhere.

More free biotechnology stock ideas: