Two Biotech Stocks Snub The Stock Market Correction

Friday’s market did not produce a wealth of new highs. But two biotech stocks recently drove past buy points to new highs, and remained in strong standing Friday, despite the stock market correction.




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Innoviva (INVA) is a Brisbane, Calif.-based developer of small molecule drugs to treat respiratory diseases. The company — buoyed by a partnership with GlaxoSmithKline (GSK) — turned profitable in 2015, reporting a 3,200% EPS gain in 2016 and a 112% advance last year.

Estimates call for a 33% gain in earnings this year.

The stock cleared a 16.94 cup-with-handle base Nov. 21. It has pulled back to just below that entry, dipping below its 10-week line in light trade on Thursday.

The stock has a strong relative strength line, big pretax margins and no long-term debt.

Vanda Pharmaceuticals (VNDA) punched to a new high on Dec. 3. Vanda that day announced positive phase 2 trial results for tradipitant — a treatment for the digestive tract ailment gastroparesis.

It has since given back that gain and on Friday was testing support at its 50-day moving average. That also put shares back in buy range above the 23.60 buy point in a cup base.

Vanda specializes in treatments for central nervous system disorders. MP Securities analyst Jason Butler hoisted his price target on the stock early this month to 52 from 36.

Butler contends that Vanda’s tradipitant is a unique offering in a $3 billion per year market where treatments can cost $10,000.

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