Ardea Biosciences, Inc. (RDEA)

[surf1944]

Ardea Biosciences, Inc. (RDEA) develops drugs for "the treatment of gout, human immunodeficiency virus (HIV), and cancer. The products include: RDEA594, a Phase IIb clinical trial product for the gout; RDEA684, a preclinical trial product for gout with hyperuricemia; RDEA806, a non-nucleoside reverse transcriptase inhibitor, which completed Phase II clinical trial for the treatment of patients with HIV; and RDEA427, which is in first-in-human micro-dose pharmacokinetic study for the treatment of HIV infection. RDEA is evaluating RDEA119, an inhibitor of Mitogen-activated ERK kinase (MEK), which is in Phase I/II study in combination with sorafenib and as a single agent in a Phase I study, both in advanced cancer patients. The company has a license agreement with Bayer to develop and commercialize MEK inhibitors for various indications." (Yahoo Finance) RDEA has short interest of 18.10% as a percentage of the float. It could get short squeezed, but this could also push RDEA downward in the near term, if there is no positive news. The recent PJ downgrade of RDEA to neutral is not a positive sign. The company has a good cash position with $80.61M, while it carries only $3.56M in debt. Plus insiders have bought 495,549 shares of RDEA in the last 6 months. This is approx. $12.88M at a price of $26 (the current price is $28.35). This indicates a strong belief in the company's prospects longer term by people who should know the most. This company is worth a good look. The average analysts' recommendation is 1.3.

All of these stocks are worth watching closely. The first two would seem to have better chances of near term upside. They both have high Betas though, which means they could go down quickly in an overall market downturn. Watch carefully for this. RDEA's Beta is only 1.1. It should move down less quickly in a market downturn, but it will move up more slowly too. I note the market looked suspiciously weak today (Monday).

http://seekingalpha.com/article/267236-3-biotech-stocks-on-the-edge-of-success?source=yahoo