A Rebound For Human Genome Sciences?

Human Genome Sciences (HGSI) is currently the most-watched diagnostic substance stock according to The Motley Fool… and for good reason!  As volatile as biotech stocks are I truly believe that this company should outperform over the next several years. They just had an FDA approval on Benlysta, their lupus drug, and the sales from that alone should shoot revenues through the roof.

And the big announcement released yesterday was that Benlysta received marketing approval as a treatment for lupus in patients who have not been helped by standard therapies. The U.S. Food and Drug Administration approved Benlysta on March 9, making it the first new treatment for lupus in the U.S. in more than fifty years. Benlysta was brought to market in partnership with London-based GlaxoSmithKline

But besides their flagship lupus drug, HGSI develops gene-based protein and antibody drugs to treat cancer and immunological and infectious diseases.  Guru funds sold a net $204 million out of their $255 million prior quarter position. Top guru funds that sold HGSI include SAC Capital Advisors LP($203 million) and Soros Fund Management LLC ($7 million). The mean analyst target is $33, with a high target of $39, well above the current $23 price; and of the 19 analysts covering the stock, thirteen rate it buy/strong buy, four rate it hold, and the remaining two rate it at underperform/sell.

Howver, from a technical standpoint I can’t quite recommend buying in yet.  By examining the SwamiChart one can tell that we’re still getting a red “sell” signal from the SwamiPredict.  That said, the SwingWave indicator is giving a strong blue “valley” signal that could suggest a possible reversal.  Therefore, if we begin to see any bottom support creation I would absolutely consider buying-in with accordance to a “value” and “swing” strategy.

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