This is the weekly chart on Loxo Oncology. This biotech focuses on cancer treatments by targeting genetic mutations that create protein chimers that lead to unregulated cellular proliferation. In English, and very simply, imagine a copy machine. When you press 'Copy' you should get one duplicate of the item you want copied. Cells have similar systems where a protein in the cell membrane receives a signal from the outside world telling the cell to divide and make a copy of itself.
Now imagine your copy machine crosses circuits with a 'Repeat' button. This will lead to infinite, unchecked copying. In cancer a similar thing occurs. Genetic mutations can cause the growth signalling protein to get joined to other proteins leading to unchecked, infinite cellular proliferation. This is one of the several steps to developing cancer. Loxo has developed and is testing drugs that target these specific mutations.
Their leading drug, Lorotrectinib, targets TRK fusion proteins (-tinib as a suffix indicates it inhibits tyrosine kinases) and has shown good efficacy in combating several types of cancer with minimal side effects reported. Notable upcoming events are a data review at an upcoming oncology conference October 19-23, Earnings Report on 11/5/18, and a New Drug Application review PDUFA by the FDA on 11/26/2018. The last date is the most important as Loxo could see Lorotrectinib obtain FDA approval. Other possibilities for the PDUFA are an extension of the review or rejection of the drug. From the research reports I have read so far on Lorotrectinib I am doubtful a rejection/denial will happen. I suspect it will either be approved or the review extended and this will depend upon new data, likely to be presented in October.
The chart currently looks bullish to me. There is a clear uptrend long term with us likely in a Wave 2 in Elliot Wave Theory. Mid term price is consolidating in a descending wedge/bull pennant. The safe trade is to buy once price breaks the top of the channel. An aggressive option is to buy when price touches the bottom of the channel. If I buy prior to earnings I will probably trim half my position the day before ER then play the run up to the PDUFA review late November.
***This is not investing advice. I am not an investing professional. Do not invest what you cannot afford to lose. All investors should seek guidance from licensed financial advisers and not random people on the internet.***
Now imagine your copy machine crosses circuits with a 'Repeat' button. This will lead to infinite, unchecked copying. In cancer a similar thing occurs. Genetic mutations can cause the growth signalling protein to get joined to other proteins leading to unchecked, infinite cellular proliferation. This is one of the several steps to developing cancer. Loxo has developed and is testing drugs that target these specific mutations.
Their leading drug, Lorotrectinib, targets TRK fusion proteins (-tinib as a suffix indicates it inhibits tyrosine kinases) and has shown good efficacy in combating several types of cancer with minimal side effects reported. Notable upcoming events are a data review at an upcoming oncology conference October 19-23, Earnings Report on 11/5/18, and a New Drug Application review PDUFA by the FDA on 11/26/2018. The last date is the most important as Loxo could see Lorotrectinib obtain FDA approval. Other possibilities for the PDUFA are an extension of the review or rejection of the drug. From the research reports I have read so far on Lorotrectinib I am doubtful a rejection/denial will happen. I suspect it will either be approved or the review extended and this will depend upon new data, likely to be presented in October.
The chart currently looks bullish to me. There is a clear uptrend long term with us likely in a Wave 2 in Elliot Wave Theory. Mid term price is consolidating in a descending wedge/bull pennant. The safe trade is to buy once price breaks the top of the channel. An aggressive option is to buy when price touches the bottom of the channel. If I buy prior to earnings I will probably trim half my position the day before ER then play the run up to the PDUFA review late November.
***This is not investing advice. I am not an investing professional. Do not invest what you cannot afford to lose. All investors should seek guidance from licensed financial advisers and not random people on the internet.***
With this news Loxo becomes an attractive take over candidate as Bayer is already partnered with them and they have several drugs similar to Larotrectinib coming down the pipeline.