Onyx Pharmaceuticals is finding new ways to treat cancer

Posted Jan 4th 2008 6:39PM by Joseph Lazzaro
Filed under: Stocks to Buy

The market's continued choppiness/consolidating pattern does not mean there aren't growth stocks out there for high-risk investors, and Onyx Pharmaceuticals is one pharmaceutical company that fits the bill.

Onyx Pharmaceuticals, Inc. (Nasdaq: ONXX) specializes in small molecule technology, a new, promising method that blocks cancer-causing mechanisms in the human body. In collaboration with Bayer Pharmaceuticals, the company develops and markets compounds that inhibit the function, or modulate the activity of the RAS signaling pathway to treat cancer and other diseases.

Analysts believe ONXX's cancer drug Nexaver as a treatment for advanced kidney cancer could be a big winner, with the company gaining FDA approval for the drug in 2005. ONXX is also testing the drug as a possible treatment for other kinds of cancer (liver, skin, and lung cancer). The Reuters F2007/F2008 EPS consensus estimates for ONXX are -$0.52 to $0.97.

The First Call mean rating for ONXX is: Buy [14 firms]. Mean 2008 target: $59.00 [high: $78, low: $40].

Stock Analysis: Onyx Pharmaceuticals is a high-risk stock not suitable for moderate-risk or low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from ONXX's shares. Sell/Stop Loss if you were to purchase shares in this company: $33.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

Tags: cancer, cancer treaments, health care, ONXX, Onyx Pharmaceuticals, pharmaceutical sector