Trading FDA, Clinical Trial Binary Events: $AMRN $CXSPY $AZN

Beyond the Bio Run-Up strategy of selecting a basket of small/micro-cap stocks with pending binary events such as FDA decisions and clinical trial results, another means of achieving diversification is by selecting a basket of companies with different types of pending catalysts. Below are some examples of how to categorize pending bio-catalyst events and some specific examples for each category.

1.) Long-Term Hold: Amarin Corp. (NASDAQ:AMRN) ($2.37, $234 million market cap)

AMR101 (Ethyl-EPA) is a prescription-grade omega-3 fatty acid that has been marketed in Japan for over 10 years as EPADEL by Mochida Pharma. Ethyl-EPA is differentiated from Glaxo’s (NYSE:GSK) $1 billion dollar product LOVAZA (omega-3-acid ethyl esters) in the following key areas:

- no fishy smell / taste

- lacks Ethyl-DHA omega-3 fatty acid component, which can raise bad cholesterol (LDL) levels

- potential to address a much larger patient population including those with triglyceride levels of 200-500 mg/dL vs. LOVAZA, which is indicated for patients with triglyceride levels greater than 500 mg/dL

Amarin is fully funded through a potential NDA filing (projected to occur in 2012) with ongoing partnership discussions and the Company expects to report top-line results from both pivotal studies (the MARINE and ANCHOR clinical trials are being conducted under a Special Protocol Assessment or SPA agreement with the FDA). Amarin is focused on the US market (where Glaxo derives over two-thirds of its LOVAZA sales) and the next catalysts for the Company include completing patient enrollment in the pivotal studies and a potential partnership for the US market.

2.) Under the Radar Foreign ADR: ChemGenex Pharma (OTC: CXSPY.PK) ($4.13, $78 million market cap)

ChemGenex received a Complete Response Letter (CRL) from the FDA in April, following a March meeting of the Oncology Drug Advisory Committee (ODAC) for OMAPRO (omacetaxine mepesuccinate), seeking approval for treatment of chronic myeloid leukemia (CML) patients that have a specific (T315I) mutation and have failed standard treatment with GLEEVEC (imatinib).

The CRL did not contain a request for a new clinical study and no request was made to enroll additional patients in the Company’s pivotal study.

The Company is working to validate a companion diagnostic test for the mutation and to correlate positive OMAPRO treatment outcomes in this group, which typifies the trend toward personalized medicine – especially in the field of oncology where a better understanding of cancer at the molecular level has led to niche treatment options rather than a single treatment option for the disease.

ChemGenex has partnered OMAPRO with Hospira (NYSE:HSP) in Europe, Mid-East, and parts of Africa for an upfront payment of A$17.8 million and the potential for an additional A$119.4 million in development / sales milestones while retaining rights in all other regions, including North America