Shares in Onyx Pharmaceuticals (NASDAQ:ONXX) were up almost 135% during the first quarter. That is notable because shares in the company rose more than any others on the NASDAQ during the January 1 to March 31, 2007, period.
Onyx doesn't make any money. Clinical trials of its drug Nexavar, a treatment for liver cancer, have gone well. And the company benefited from a narrowing of its loss in the fourth quarter to $20.7 million from $38.4 million in the same period in 2005. Revenue in both quarters -- zero.
But the company has a market cap of almost $1.2 billion.
There is another side to this coin. Columbia Laboratories (NASDAQ: CBRX) was the biggest NASDAQ loser for the quarter, down almost 74%. Its drug for preterm birth did not do well. Heart pharma company AtheroGenics Inc (NASDAQ:AGIX) watched its stock go down 72%, making it the second worst performer on the NASDAQ. Hana Biosciences (NASD:HNAB), which had a big fourth quarter loss was in the No.3 spot down 70%. Achillion Pharmaceuticals (NASDAQ: ACHN) also made the list of the ten worst performing NASDAQ stocks, down 64%.
Biopharma companies are a bit like internet companies were during the 1999 bubble. They often have little or no revenue and may look good on paper, but if something goes wrong, investors hit the doors in droves.
They are great investments for people who like the idea of a gain of 100%. Or a loss of three-quarters of their investment.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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