But late in 2009 we started seeing an onslaught of low-priced stocks with small cap or micro-cap values running rapidly higher on news.  In some cases these faded, and in some not.  We saw the traders run up shares of Compugen Ltd. (NASDAQ: CGEN), Bionovo, Inc. (NASDAQ: BNVI), Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR), Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN), pSivida Corp. (NASDAQ: PSDV), Athersys, Inc. (NASDAQ: ATHX), Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS), and AVANIR Pharmaceuticals, Inc. (NASDAQ: AVNR) on news late in 2009.  Also covered as potentials for this are Biodel Inc. (NASDAQ: BIOD), Alexza Pharmaceuticals, Inc. (NASDAQ: ALXA), and Cell Therapeutics, Inc. (NASDAQ: CTIC).

We have reviewed each of these and given a synopsis for each to see if these could be the 10-baggers for 2010.

THE WINNERS OF 2009

Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ) has jumped over 1,400% from its 2009 lows in March.  Shares closed out 2008 at $1.93, giving this one returns in excess of 300% for 2009 and a market cap of $250 million.  It has Xyrem and Luvox already on the market, and it has a fybromyalgia under a new application at the FDA.

Targacept, Inc. (NASDAQ: TRGT) has jumped over 1,000% from lows.  At $3.56 at the close of 2008, this one is up roughly sixfold for the year and the market cap is about $581 million.  The company is now expected to be profitable in 2010 according to Thomson Reuters, although we would caution that the range of estimates is massive with some still listed as expecting a wide loss in 2010 (possible not updated).  The huge catalyst here is the AstraZeneca buying the rights for its depression drug.

Vanda Pharmaceuticals, Inc. (NASDAQ: VNDA) has popped over 2,300% from its lows with shares close to $11.50.  With shares at $0.50 at the end of 2008, this stock is up over 2,000% for 2009.  Even after this run, the market cap is only $312 million.  Its payment of $200 million and its agreement giving Novartis exclusive commercialization rights to Fanapt(TM) for schizoprhrenia in the U.S. and Canada.

Dendreon Corp. (NASDAQ: DNDN) closed out at $4.58 on Dec 31, 2008 but traded as low as $2.55 during the March market meltdown.  That makes this one a 10-bagger off the lows and up close to 500% for 2009.  The stock briefly traded over $30.00 this year.  Dendreon’s market cap may be more because of secondary offerings we have not calculated in the float, but the market cap is now at least $3 billion.  The pending FDA Approval (assuming it is approved) of PROVENGE as a last line of defense in prostate cancer patients is on tap for 2010.

Human Genome Sciences, Inc. (NASDAQ: HGSI) was under $0.50 in March at the lows, making those fortunate few who bought after the March price tank have a gain of 60-fold if had they still held on today.  Shares closed out 2008 at $2.12, giving the year-long holders a gain of close to 1,500%.  The market cap is now over $5 billion.  Having a very promising drug candidate for lupus, where no effective new treatments have come in a generation, is what HGSI holders have to thank for this gain.

THE RECENT NEWS TRADE SET-UP STOCKS

Compugen Ltd. (NASDAQ: CGEN) has rallied sharply and even a secondary offering did not hit it much.  We have a market cap listed as $141 million, but we’d note that it just closed upon the $19 million in shares sales.  At $4.94 today, its 52-week trading range is $0.39 to $5.86.  Technically that is a 10-bagger already, but the second wave of the price run-up came in December when shares rose from under $3.00 to as high as $5.86.  The Israel-based company has raised capital twice but ran after it announced positive therapeutic effects of a novel peptide in an animal model of treating inflammatory bowel disease.  Then came the next wave for the company.

Bionovo, Inc. (NASDAQ: BNVI) is not exactly a household name and is a penny stock, but the publication of results from its study on the anti-tumor mechanism of BN107 in the International Journal of Cancer describing the potential molecular mechanisms mediating the selective pro-apoptotic effect induced by BN107 on estrogen receptor negative breast cancer cells was the culprit.  Shares are back down under the post-pop news at $0.47 in the last day of 2009.  The 52-week trading range is $0.17 to $1.15 and the market cap is only $51 million.

Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR) ran sharply before Christmas as the FDA now considers that the firm has provided a complete response to all prior action letters for its supplemental New Drug Application to market H.P. ActharGel for the treatment of infantile spasms. The FDA has set the PDUFA in June 2010 for this sNDA, giving this an upcoming binary event for options traders.  At $4.77 it has a $306 million market cap and its 52-week trading range is $3.10 to $9.63.

Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN) ran earlier in December on “proof of concept data” as a hepatitis C fighter.  Brokerage firm Roth Capital currently expects to see exponential gains in this stock on an as-is basis.  At $3.20 after a big gain on December 31, the 52-week trading range is $0.65 to $3.89.  The market cap here is a mere $85 million.

pSivida Corp. (NASDAQ: PSDV) also ran late in December.  Shares were up over 65% to $5.83 giving the company a market cap of $106 million at the time the news of the 24 month results from the Phase III FAME study of Iluvien for the treatment of Diabetic Macular Edema.  This one is back down to $3.80 and has a market of $69 million; the 52-week range is $0.60 to $6.25.  Technically, this already became a 10-bagger briefly, but the market cap is tiny here.

Athersys, Inc. (NASDAQ: ATHX) soared in December after it entered into a development and commercialization pact with Pfizer Inc. (NYSE: PFE) for MultiStem(R) for the treatment of Inflammatory Bowel Disease.  Athersys shares were up 192% at $2.92 on the day the news broke.   The stock doubled again after that and hit as high as $6.40 before Christmas and shares sit at $4.30 on the last day of 2009 with a market cap of about $81 million.

Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS) is a micro-cap stock with a market cap of almost $38 million with shares at $1.10 on the last day of 2009.  It has a 52-week trading range of $0.05 to $2.43, so the crazy volume around this one now is easy to see.  The catalyst was positive data from its two Phase II clinical trials showing strong efficacy and safety profile when used as a single agent or in combination with chemotherapy in patients with difficult to treat acute myeloid leukemia.  The volume went exponential on this when the news was out.

AVANIR Pharmaceuticals, Inc. (NASDAQ: AVNR) first surged when Zenvia™ in the treatment of pseudobulbar affect among patients with underlying multiple sclerosis (MS) or amyotrophic lateral sclerosis (ALS) was announced.  Then it took the leaderboard again in December on additional drug data.  Shares are well off of the highs here. At $1.88 on the last day of 2009 the market cap is small at $156 million and the 52-week trading range is $0.25 to $4.09.  This stock has been around since the early 1990′s and briefly traded above $30.00 earlier this decade.

OTHER LESS-COVERED CANDIDATES, MAYBE

Biodel Inc. (NASDAQ: BIOD) is at $4.47 after an 8% gain on the last day of 2009 on massive volume.  Wedbush Morgan reiterated its outperform rating and $17.00 target.  The market cap is only $106 million and the 52-week trading range is $3.29 to $6.02.  The catalyst here is an upcoming FDA hopeful acceptance of the VIAject NDA filing in Q1 2010.  That wouldn’t mark a ten-bagger return, but it would make an exponential return.

Alexza Pharmaceuticals, Inc. (NASDAQ: ALXA) has submitted its NDA for Staccato® loxapine to the FDA and has a PDUFA expected date in late-2010.  This is an inhalation product candidate being developed for the rapid treatment of agitation in patients with schizophrenia or bipolar disorder.  At $2.34 the market cap is $120 million and the 52-week trading range is $1.40 to $3.40.  This has been public since 2006 and traded up from $10 to $15 very briefly in 2007.

Cell Therapeutics, Inc. (NASDAQ: CTIC) cancer drug received an orphan status in Europe and has a FDA Oncologic Drugs Advisory Committee decision in February 2010 and an expected decision in what appears to be April-2010..  At $1.14 and at a $654 million market cap, this one has a 52-week trading range of $0.05 to $2.23. This one has been around since the 1990′s and it used to trade far higher… unbelievably higher.

You can join the 24/7 Wall St. free daily email list for updates on many biotech and non-biotech issues.  We cover major picks each day, as well as analyst upgrades and downgrades, day trading and active trader alerts, key news on Buffett and other gurus, Mergers and acquisitions, and even IPOs and secondary offerings.

You probably noticed how little coverage was given on stem cell stocks, obesity and diabetes candidates and more.  We are covering these individually in sectors again in January for 2010 and 2011 outlooks.  As always on these stocks, we have featured some stocks which have already moved based on the big trader chases we have seen in 2009.  Some of the stock moves have been outright silly, but some will have very large trading days based upon FDA news and presentation of news and events in 2010.  Some of these might become the next ten-baggers, but there is always the chance that none of these will live up to great expectations.

Have a great 2010!  Stay tuned.

JON C. OGG

Athersys will receive a $6 million cash payment up front from Pfizer to fund the research during the first and initial part of this pact.  The standout note from Pfizer is that it noted how Athersys represents a cornerstone of Pfizer’s stem cell and regenerative medicine plans.  Athersys is eligible to receive milestone payments of UP TO $105 million upon the successful achievement of certain milestones in development, regulatory approvals and commercial limits.

Athersys shares are up a whopping 192% at $2.92 today after closing at 1.00 on Friday.  Trading volume is almost 6.8 million shares as of 12:15 PM EST, and the average trading volume is only 30,000 shares per day… Sorry, it was only that amount.  Even after the huge gain, the market cap is listed as a mere $54 million.

To show how much traders are willing to chase the companies on any such news, this stock has an intra-day high listed as $3.95.  Athersys was very briefly an $8.00 stock back in 2007 when it came public.  In 2008 it slid from over $4 down to under $1.00 throughout the year.  Shares had recovered off of lows, but nothing at all like what we are seeing today.

As of September 30, 2009, the company had $18.8 million in cash and short-term investments, and listed another $3.94 million in long-term investments.  Its total liabilities are listed as only $1.665 million.

JON C. OGG
DECEMBER 21, 2009

• Amgen (NASDAQ: AMGN) Started as Buy at Deutsche Bank.
• Athersys (NASDAQ: ATHX) started as Buy at Lazard Capital.
• Genentech (NYSE: DNA) Started as Buy By Deutsche Bank.
• Gilead (NASDAQ: GILD) Started as Buy at Deutsche Bank.
• Sepracor (NASDAQ: SEPR) raised to Buy at UBS.

You can see the list of negative calls and downgrades here.

Jon Ogg
June 19, 2008

Achillion Pharmaceuticals, Inc. (ACHN)    $2.45    Down $0.30    Down 10.91%
Additional ‘positive’ top-line phase 2 data for Elvucitabine

Crucell NV (CRXL)   $18.13    Down $0.64    Down 3.41%
No fresh news

MannKind Corp. (MNKD)    $2.7999    Down $0.1801    Down 6.04%
No fresh news besides tied to Novo’s news yesterday.

Sequenom Inc. (SQNM)    $12.17    Down $0.66    Down 5.14%
Sued yesterday by Beckman and partner Orchid.

CytRx Corporation (CYTR)    $0.7733    Down $0.0567    Down 6.83%
Drop on second day after Lou Gehrig’s drug delay.

Cytori Therapeutics, Inc. (CYTX)  $7.94    $Down 0.62    Down 7.24%
No fresh news today, post patent selling after big 2-day move.

Introgen Therapeutics Inc. (INGN)    $1.68    Down $0.09    Down 5.08%
No news, thin volume

Athersys, Inc. (ATHX)    $2.80    Down$ 0.29    Down 9.39%
No news yet out of diabetes and obesity conference, ahead of data but super thin volume

Micromet, Inc. (MITI)    $2.42    Down $0.20    Down 7.63%
No news, but presented non-Hodgkins data last week.

Genitope Corp. (GTOP)    $0.075    Down $0.013    Down 14.29%
Received NASDAQ letter on listing, but very low stock price so no surprise.

Jon Ogg
June 10, 2008