Sucampo Pharmaceuticals (SCMP) a good risk/reward play

8 Feb

Sucampo Pharmaceuticals, Inc. (SCMP)

 The following research is based on a potential momentum play based on the Companies PDUFA date for Amitiza of April 26, 2013.  Sucampo Pharmaceuticals, Inc. is a global pharmaceutical company focused on the discovery, development and commercialization of proprietary drugs based on prostones. Prostones are a class of compounds that occur naturally in the human body as a result of enzymatic catalysis by 15-PGDH of eicosanoids and docosanoids.

 About Amitiza:  from the Companies website: (http://investor.sucampo.com/phoenix.zhtml?c=201197&p=irol-presentations)

  • Amitiza has been used for over 6 years with 6 million prescriptions by patients with chronic idiopathic constipation and irritable bowel syndrome with constipation
  • Priority review in the US (although FDA extended review by 3 months) with target filing in the UK and Switzerland in Q1 2013 as sNDA for treatment of Opioid-Induced Constipation
  • Pregnancy warnings have been removed from labeling
  • Good safety data and product efficacy

 Product pipeline

scmp pipeline

Key catalysts

scmp value drivers 

Financial info

From Sep 29, 2012 SEC filing:

  • Cash $ 78.6M
  • Total assets $ 121.1M
  • L-T debt $ 61.2M
  • Looks to be in solid cash position; should be able to last through potential approval without further dilution, i.e. stock offering(s)

From quote summary Yahoo! Finance 2/8/13

  • Market cap $ 219.6M
  • Shares o/s 41.59M, float 13.34M
  • P/E n/a
  • Average analyst target $ 8.00

Stock data

scmp chart 

 

While the chart above is not the most impressive chart, the stock has been trending sideways with a slight bias to the upside.  As you can see from the trendline drawn there should be a nice floor for the stock around 5.06-5.08.  What I would like to see is a break at 5.50 on greater than average volume.  Once that happens we could see a run back to the 6.00 area before the PDUFA date.  I think this will start to see increased volume in the next couple of weeks once people roll out of other plays and see the potential in this one.  I think there is a greater than 60% probability that this will be approved based on prior use of the drug, the safety and efficacy.  Coupled with possible European filings there are enough catalysts to create nice potential for a 20-25% gain.  There is a nice risk reward on this with IMO.  Set your stop a little below 5 and look to sell around 6.

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https://pokerexpress.wordpress.com/category/biotech-momentum/

Disclosure:  currently long SCMP

Disclaimer: I have never ever been paid or compensated by anyone for any stock I trade or discuss. None of the information posted on this site is to be construed as financial or investment advice. This information is not to be construed as an offer to buy or sell any security mentioned on this board. The creator of this board is not a licensed broker or financial advisor of any kind. The information on this site is gathered from sources available to the public. As consideration in using this board, all users agree, understand, and acknowledge the creator of the board is not liable or responsible for the accuracy or use of the information provided on this site and agree to indemnify and hold the creator of this board harmless from any liability resulting from the accuracy or inaccuracy of the information and from use of the information on this board. All of the information that I post on this board is public information available to anyone! You are responsible for your own trades and not the creator of this board.  Please be aware that investing in securities carries the risk of losing some or all of your money.

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3 Responses to “Sucampo Pharmaceuticals (SCMP) a good risk/reward play”

  1. pokerexpress February 20, 2013 at 9:25 am #

    Good news for the stock this morning as RESCULA is now at U.S. pharmacies. Will look for that 5.50 break on big volume today and will set up a stop right below once it crosses.

  2. pokerexpress March 13, 2013 at 10:46 am #

    Still holding, and stock never crossed 5.50 as listed above. This one has been trending downwards in the last week or so and was downgraded yesterday, but managed to close up a few pennies for the day. I think that is a positive for the stock and think we should see a nice rally in the next week or so…

  3. pokerexpress March 20, 2013 at 3:01 pm #

    Exited today at 5.85 for a nice 15+% gain on the trade. Will watch this one and comment if I get back in for another ride before PDUFA.

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