Despite its recent share price surge, Thom Calandra thinks BioCryst Pharmaceuticals (NASDAQ: BCRX, Stock Forum) is still undervalued and doesn’t think anyone in for a quick trade should be selling the stock. He believes it’s a way of preparing for a scenario that at some point will arise in the world – it is almost inevitable that a pandemic will come.
BioCryst Pharma isn’t just an influenza company, he added, and it’s not a vaccine it’s an anti-viral treatment and it also has a leukemia candidate. As well, it probably has new drug applications in the works for several autoimmune diseases. It is also working on a possible new molecular compound for cardiac arrests.
So what could BioCryst stock be worth eventually? Calandra thinks “it could be a $2 billion company one day. It may take two to four years, though.” BCRX’s Peramivir (influenza drug) is in Phase III currently and it is important to note that it’s an inject-able drug, which distinguishes it from anything else in the market. Injections may be important in the future should we see another pandemic.
While he realizes there’s a possibility of a short-term pullback in BCRX stock, the idea of a pandemic is now in people’s minds and that the pandemic premium is probably going to stick to some of the real companies.
For example, Quidel Corporation (NASDAQ: QDEL, Stock Forum), which makes diagnostic tests, is another stock that Thom purchased during the past couple days. The company is profitable and Thom is a big believer in diagnostics. He thinks this stock will get more awareness because of all the pandemic talk, but “a pandemic is not why you buy these companies. You buy them either because they have great diagnostic technology or great drug discovery technologies.”
Calandra’s advice for investors wanting to cash in on the swine flu scare: “I think they’re insane,” he says, “Try to buy BioCryst under $3 if you can and hold it for at least a year … and ideally longer than a year.”
Thom in a Ticker Trax issue to subscribers, scheduled for Wednesday afternoon, said he intends to arrive at a fair-value price for the company, given its drug discovery methods and a portfolio of candidates that address influenza, psoriasis, leukemia and cardiac arrest.