Cramer’s biotech bonanza: A zone free from oil pain
As the market licks its wounds from the hideous decline in oil prices, Jim Cramer would like to remind investors that there is one leg of the industry that has no economic sensitivity whatsoever to the price of oil: biotechs. They have the potential to grow like crazy, regardless of the world's economy.
In light of the American Society of Hematology (ASH) meeting that came to a close this week, the "Mad Money" host considered this a good time to review the best names in the biotech space, and reveal the winners of the ASH.
First, is Agios Pharmaceuticals, which presented data on its key drug AG-221, for acute myeloid leukemia. They advised that key trials designed to get the drug approved will be starting as soon as next year. Though the stock has already had a 368 percent run year-to-date, Cramer thinks the rough seas of the current market could be a good buying opportunity.
Bluebird Bio was the next winner. It develops gene therapies to treat people born with genetic diseases and has great things in the pipeline, such as a treatment for sickle cell anemia that could lead to billions of dollars in opportunity. It has also teamed up with Celgene to develop chimeric antigen receptor t-cell immunotherapy (CAR-T) as a new way to treat cancer, causing the stock to spike 88 percent on Tuesday.
Then there is Kite Pharma, which also shot up 18 percent on Tuesday from its development of CAR-T immunotherapy for diffuse large b-cell lymphoma. The "Mad Money" host added that they plan on doing a secondary offering soon, which could provide a weakness for investors to buy into.
The big winner from the conference was Celgene. It also had a big jump this week when it released positive data on its two leading drugs, Revlimid and Pomalyst.
"But the real reason I adore Celgene coming out of this American Society of Hematology meeting is because they have partnered with some of the hottest small-cap biotech players at the conference," Cramer said.
What does that mean? It means they are becoming a catalyst for all sorts of new innovative therapies. Celgene owns 15 percent of Agios, and has stakes in Acceleron and Epizyme, two additional companies that received positive attention. It has also partnered up with Bluebird. Cramer believes this company will have a great pipeline for years to come, and the stock will head higher.
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"Although, again, why not wait for further pullback here as this correction winds its way through the system, bringing down the good with the bad and giving you a chance, finally, to buy Celgene at a lower price than where it currently trades," he added.
Time to blow the dust off the checkbook, and start buying into weakness.
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