GO
Loading...

Back To Biotech: Risk & Reward

Wednesday, 14 Nov 2007 | 11:06 AM ET

In the 1990 downturn, biotech was the best place to be. And Amgen was the best of the best in biotech, Cramer said, with the highest risk and highest growth of the group. Today, Amgen’s stand-in is Onyx Pharmaceuticals.

Lesson Learned
Mad Money host Jim Cramer looks to what worked in the '90s in order to find what works today.

Onyx’s big drug, Nexavar, has been approved to treat a common form of kidney cancer. Nexavar, like Celgen’s Revlimid and Genentech’s Avastin, is benefiting from label expansion as its being used off-label to treat liver cancer. That was a large part of why Onyx’s last quarter – where the Street expected a loss of 21 cents per share and it beat by a penny – was so phenomenal, Cramer said.

The company is expected to get approval for Naxavar to treat liver cancer on-label soon, and the company is also starting trials using the drug on solid tumors as well as on types of lung cancer. That should add up to enormous growth for Onyx, Cramer said. Possibly even stronger than the growth it delivered last quarter.

Onyx’s drug is effective and in demand. But the stock is riskier than Celgene or Genentech because it isn’t as big, as well established, or as profitable. The bottom line is that this market is making it clear that every portfolio should have a high-growth biotech stock, one that would perform like Amgen did in 1990. Onyx is the closest match, according to Cramer.



Questions for Cramer?
madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

  Price   Change %Change
AMGN
---
CELG
---
OX1
---

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.