Time To Take Profits On This Scorcher
The Dynamic Wealth Report
November 12, 2009
by Robert Morris, Editor
This past July I wrote an article about the amazing profits Penny Stock
Breakouts subscribers banked on Human Genome Sciences (HGSI). In the
article, “Can You Really Triple Your Money In Just One Day?” I shared
all the details of this incredible story.
Yes, I made sure to tell you about the one day gain of 334%. And the
fivefold return in just two weeks.
However, I wasn’t sharing this story just to brag about a successful
trade. I wanted to show you a real life example of the huge profits you
can make trading penny stocks.
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But, that’s not all…
I also wanted to let you in on a terrific trading opportunity.
Hopefully you took my advice in July and picked up a few shares of HGSI. If you did, you’ve now
doubled your money in a little over three months
time!

What’s behind the recent surge?
Last week, HGSI reported the results of an important clinical trial for
their experimental lupus drug—BENLYSTA. This was the second of two late
stage trials required by the FDA.
The results from the first of these two trials sent HGSI soaring back in
July. They showed nearly 58% of lupus patients who took BENLYSTA had
improvement in their symptoms.
Despite these terrific results, the future of BENLYSTA still hinged on
the results of this last trial. If the drug failed, HGSI would have had
to go back to the drawing board. And, you better believe the stock would
have plunged.
Fortunately, the results were good.
They showed BENLYSTA eased symptoms in more than 43% of lupus patients
who took the drug. That’s significantly better than the existing
treatment. Only 33% of patients who took the existing treatment showed
improvement.
BENLYSTA is now one step closer to becoming the first new drug for lupus
in 50 years. This is a great relief for the 5 million people worldwide
suffering from this horrible disease.
Now, you may have noticed the results of the second trial were not quite
as good as the first. I don’t think this is anything to worry about. The
difference in results shouldn’t prevent the drug from gaining FDA
approval.
According to HGSI, there are two reasons to explain the discrepancy.
One reason is the two trials involved patients from different
geographies. The other is the patients received different levels of
background therapy.
The bottom line is BENLYSTA improves lupus symptoms.
Investors are more than satisfied with the results. They sent HGSI up
35% on the news. And, they’re continuing to drive the shares higher and
higher.
Management’s confident in the results as well.
They’re going to apply for FDA approval in early 2010. And, they believe
it’s possible the drug could be on the market before the end of next
year!
This is fantastic news for shareholders.
You see BENLYSTA is poised to be the company’s first blockbuster drug. That’s no small potatoes. Blockbuster drugs by definition generate $1
billion or more a year in revenue.
The quicker BENLYSTA is approved, the quicker HGSI can start raking in
the dough. And, it looks like there will be quite a lot of dough!
BENLYSTA is estimated to cost anywhere from $15,000 to $30,000 per
patient per year. The patient population HGSI will be targeting in the
U.S. numbers about 200,000.
A bit of simple math and you can see how BENLYSTA could generate annual
revenue of $3 billion to $6 billion. Not bad considering HGSI’s market
cap is about $4.7 billion.
It’s no surprise the shares are skyrocketing.
But, there’s more to the story.
HGSI has an agreement with pharmaceutical giant GlaxoSmithKline (GSK). The agreement says the two companies will share development costs for
BENLYSTA and any potential profits.
However, GSK may decide it wants BENLYSTA entirely for itself.
In that case, GSK would buy HGSI outright. Any potential takeover would
be great for shareholders as GSK would probably pay a hefty premium for
HGSI.
What to do now?
Doubling your money on a stock in three months is a fantastic return. Lock in some profits by selling half your position now. But, hang on to
the other half to participate in any further upside.
Oil prices are falling on the government’s report crude stockpiles are
rising. The EIA said oil supplies rose by 1.8 million barrels in the
past week. A much bigger increase than analysts expected. As a result,
the PowerShares DB Crude Oil Double Short ETN (DTO) is surging nearly 6%
today.
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