Believe it or not, sometimes even Jim Cramer doesn't have the answer when fans ask him about certain stocks. When that occurs, he considers it his duty to do his homework and provide an opinion on the stocks that stumped him.
On July 15 a caller asked about UniQure. This is a gene therapy developer that is working to create therapies to cure serious disorders in one shot. Its lead drug was approved in Europe for a subset of patients with LPLD, a rare genetic disease that can lead to multiple attacks of pancreatitis.
Additionally, UniQure has a pipeline with earlier-stage programs with therapies for hemophilia and congestive heart failure. It also entered into a partnership with Bristol-Myers back in April to work together on cardiovascular therapies. In Cramer's research he thinks that gene therapies have the potential to be huge.
"That makes me think UniQure's worth speculating on. Seems like a good one to me," the "Mad Money" host said.
Next up was La Jolla Pharmaceuticals, which is a small biotech focused on treating life threatening orphan diseases. Its lead drug is a therapy for patients with catecholamine-resistant hypotension. That is a life threatening condition where one's blood pressure drops to dangerous levels.
But the thing about La Jolla is that the stock is up 60 percent year to date, and Cramer thinks most of the upside is already baked into the stock at these levels. So, while he does like the company, he thinks investors may be a bit late on this one and does not like the risk-reward of the stock.
The "Mad Money" host was also stumped when he received a question on Karyopharm Therapeutics. This is a speculative, development-stage biotech with a lead product candidate called Selinexor, which is being studied as a treatment for various types of blood cancer. It essentially works by blocking the expression of a gene that is commonly found in treatment-resistant cancer cells.
However, the stock has become unloved this year and dropped more than 40 percent year to date. Much of the damage was done by a secondary offering in January. Cramer now considers this to be a good entry point for Karyopharm, but investors should be aware that it will be a rocky road.
Cramer was also asked about Array BioPharma, which is another small biotech company that is devoted to fighting cancer. Array currently has six phase-3 studies surrounding three different cancer drugs: one for melanoma, while another targets tumor growth. The third one, a partnership with AstraZeneca, is a treatment for a type of lung cancer, differentiated thyroid cancer, and a kind of melanoma found in the iris of an eye.
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Array was hit hard, down 38 percent in the past six weeks primarily because AstraZeneca announced that the study of a drug it partnered with it on failed to meet its primary endpoint. However, that didn't deter Cramer, as this drug was only a small piece of the Array pie.
"I think Array could be a bargain at these levels, but you have to remember that it's speculative and be willing to take some pain and volatility if you're even going to think about owning it," Cramer said.
So while the "Mad Money" host tries his best to know most stocks, sometimes he has to crunch the research and get to know stocks before providing an opinion. In this case, he is willing to recommend UniQure, Karyopharm and Array.