Mad Money

The Little Biotech That Could

If you’re looking for a speculative biotech stock that Cramer thinks has the potential to go much higher, check out AMAG Pharmaceuticals .

Cramer: Iron Age?

This little biotech name is developing a drug, known as Ferumoxytol, that could change the game for how doctors deliver iron to dialysis and anemia patients. The drug has gone through Phase III testing and AMAG recently submitted the official application for approval to the FDA. Now it’s just waiting. Cramer thinks it will sail through and that will be the catalyst to send AMAG to new highs.

Right now it takes a long time to administer iron to patients. But AMAG’s drug is, as far as Cramer is concerned, the best in its class because it is safer, more convenient and delivers results faster than anything else out there. The market for intravenous iron is big – $300 to $500 million – and all signs point to AMAG’s drug quickly dominating thanks to its speed and safety.

That’s the story with the drug. How about the stock? AMAG soared last fall when it released positive data on Ferumoxytol but then came down after doing two secondary offerings. This is a case when you buy after the secondary, Cramer said. Other than that, the stock has been unfairly pilloried after the FDA rejected a competing iron drug based on safety issues that AMAG doesn’t have and a rookie analyst downgraded it to neutral, which Cramer called a joke. AMAG is now too cheap to pass up.

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