Mad Money

Buy This Cheap Biotech Spec?

Battling Cancer

Allos Therapeutics “could be an opportunity,” Cramer said Thursday, for investors looking to speculate on the fight against cancer.

The company plans to trade launch Folotyn, a drug for refractory peripheral T-cell lymphoma, to physicians at the American Society of Hematology on Dec. 5, Cramer said, and the meeting could be “a big catalyst” for the stock.

Not to mention, Allos is developing Folotyn for multiple indications, “the jackpot when it comes to cancer research,” including CTCL, a rare form of non-Hodgkins lymphoma and lung cancer. Additional data on the trials is due out later this year and in the first half of 2010.

Folotyn is so potentially big that it makes Allos appear to be “a very cheap stock,” Cramer said. Sales of the drug could reach $300 million in the US, but even if the final tally’s only $150 million, that still adds up to about $5 a share for the stock. And ALTH closed Thursday at $5.89.

The stock took a hit as a result of Allos’ Oct. 7 secondary offering, Cramer said, and “it’s been all downhill since then.” But the company held $84 million in cash at the end of the quarter, so another raising of cash is most likely out of the question. More importantly, though, investors now have the chance to buy ALTH almost 25% lower than its trading price before Folotyn was approved on Sept. 24.

Once the drug hits the commercial market in January, Cramer said, Allos’ stock “should go higher.” But he wanted to hear from CEO Paul Berns before making the call. Watch the video for the full interview.

Call Cramer: 1-800-743-CNBC

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