On the watch: Versartis Inc. (VSAR)
What put it on my radar screen: I look for data events and VSAR has a Phase III trial readout in September for a growth-hormone deficiency drug called VRS-317. This is the results of a 12-month trial, and there’s plenty of time leading up to the announcement; that gives us a nice long runway for a breakout.
Additional plus: Perceptive Advisors and Baker Brothers are top holders in the stock. I like it when respected names are big players; it lends stability in an industry noted for its volatility.
The potential: Based on the chart and where VSAR has gone based on news events in the past, it looks to me like $20 is a possible high point.
What I’m watching / when I might act: I tend to watch stocks for a few weeks to see how they’re trading, so that when I am ready to buy I can pick up shares on weakness. I try to buy four to six weeks ahead of the data readout, meaning I’ll give the stock a much closer look come late July, at which point I will make my decision to trade or take a pass. If I buy VSAR, I’ll likely be out days or weeks before the trials results are announced, sooner if the stock hits my target.
Kyle Dennis runs Kyle Dennis’ Biotech Breakouts (biotechbreakouts.com). He is an event-based trader, who prefers low-priced and small-cap biotech stocks. At the time this article was published on RagingBull.com, he had he had no open positions, options or orders in VSAR, and last traded the stock on October 10, 2016.As noted in the article, he may soon be trading the stock again.