Best biotech trades on ASH meeting: Kensho

Fighting cancer at ASH
Fighting cancer at ASH   

Three small-cap drug firms are consistently the best performers in a study of short-term trading activity following the start of the American Society of Hematology's annual meeting, one of the industry's biggest.

The so-called ASH conference, which focuses on blood disorders, including cancers such as leukemia and myeloma, kicked off Saturday in San Francisco.

Dynavax Technologies posted positive returns 80 percent of the time in the five trading days after the start of the conference for the last 10 years, according to Kensho, a quantitative analytics tool used by hedge funds. The stock posted a median return of 7 percent over that short time span.

In October, Dynavax, which sports a $417 million market value, initiated a phase 1/2 clinical trial of a new lymphoma treatment.

Dynavax traded up 4 percent Monday after saying an asthma treatment it is developing with AstraZeneca would be accelerated to phase 2 after positive results in the initial part of its phase 1 safety study.

Exelixis was positive 86 percent of the time during those five days, with a median return of 4 percent, according to Kensho.

But be warned, Exelixis is even smaller with a market cap of just $264 million and a sub-$2 stock price. Also the shares took a big hit last week after disappointing phase 3 results for a prostate cancer drug. On Monday, the stock shed nearly 4 percent more.

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Momenta Pharmaceuticals was in the green 70 percent of the time after the conference, providing a median return of 2 percent during that week, the study showed.

Momenta is the biggest of them all with a market value of almost $700 million. Last week, the Food and Drug Administration gave a fast-track designation to its pancreatic cancer treatment, necuparanib, boosting the shares.

—CNBC's parent NBCUniversal is a minority investor in Kensho.

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