Replies to post #85591 on Biotech Values

[mcbio]

Re: CYCC position

I started a position in CYCC. The news a few days ago was pretty good. Merriman has a buy rating and a $7 target. It's a speculative play but may be worth holding onto for a while. Just hope they don't do an MBRX type of deal.

I just took a position myself, albeit a fairly small one. This one is admittedly quite speculative so I only took about half the size of a position that I normally do in a biotech. I like this approach in these more speculative biotechs because there is a lot of upside potential IMHO at this level and if it even comes close to the potential, I can get a nice gain out of a much smaller position than normal. And if things don't go as planned, I have a lot less on the line than normal.

At about a $20 million market cap, it won't take much in terms of clinical progress or even just the expectation of clinical progress to push this one higher. I like the story behind their lead drug, sapacitabine, having the potential to be the first oral drug for AML/MDS. And CYCC has shown that sapacitabine is clearly an active drug in Phase 2, although admittedly they have yet to run a randomized, placebo-controlled clinical trial. CYCC has enough cash to last about a year assuming no additional funding. They do still have the credit facility that they can tap to raise additional funds if need be next year as well. All in all, this one is clearly quite speculative, but I like the risk/reward here at a $20 million market cap.