Two cardiac stocks to buy ahead of the AHA

The AHA is coming up this weekend. There are a few good trades I see going in to the meeting. These are stocks I have talked about before, but there are good new reasons to looks at them

I know it seems crazy to think about buying any stocks right now, but there are great opportunities out there. So I would recommend taking a deep breath and buying AZN and CVTX tomorrow.

Why you might ask?

Lets start with Astra Zeneca - AZN.  This weekend at the American Heart Association meeting, the results of the Jupiter trial will be released.  This is a study looking at whether Crestor would prevent heart attacks or death in patients with normal lipids and elevated CRP - an inflammatory marker linked to development of coronary disease.  This is a large new population for which the statin medicines are not routinely used. A positive trial will result in a large increase in sales of Crestor - which is already growing nicely as a result of the Vytorin fallout as I predicted last November.  The interesting thing about this trial is that we already know the answer.  In November, AZN announced that the trial was stopped early as result of substantial benefit of Crestor.  So we know the trial is positive, but the result has been largely ignored so far.  We don’t have the actual data, and wont until Sunday. I expect the results to be front page news, and I look for a nice pop on Monday and Tuesday.

The story with CVTX is different.  They have no interesting data to present at the AHA meeting.  The news came out today.  The company which sells the angina drug Ranexa had a very eventful conference call this morning. Ranexa sales were better than expected this quarter although still pretty low.  The real big news was that the FDA finally responded to their application to change the label on the drug.  As of today, the drug can be used alone as a first line agent or in combination with the other drug classes that treat angina. Previously, the drug was recommended only for those patients who had failed first line therapy. In addition, the label removed almost all of the cautionary language related to QT prolongation and the risk of sudden death.  Even better, there was mention of the drug being effective in reducing atrial fibrillation, ventricular arrhythmias, bradycardia and even improving Hgba1c- which is a measure of sugar levels in diabetes.  The new label isn’t perfect - it does say that Ranexa isn’t a treatment for diabetes and QT prolongation is mention, but with a disclaimer that the drug doesn’t cause sudden death and seems to reduce the dangerous rhythm called VT. Still the change in label is huge.  The has been concern among a lot of doctors that the drug might be dangerous- now the label says it is safe.  It is safe enough that the company feels that they can now start marketing the drug to primary care doctors who would have been spooked in the past.  In addition, the drug reps who previously were very limited in what they could say, can now talk about any of above benefits since they are mentioned on the package insert.  The release of the new insert just before AHA is great for them.  They will be able to pitch all of the new benefits to whoever wanders by their both at the exhibits at AHA- that should be many hundred and many even thousands of cardiologists.  CVTX’s stock was up 15-20% in the premarket, but closed up only about 1%.   As a result of the crashing market, this stock isn't responding appropriately to this news - which is potentially transformative for CVTX. The stock is likely to respond soon - I suspect that prescription numbers should begin to pick up steam within the next few weeks. 

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