Biotech Stocks With Upside Potential

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Shares of Palo Alto, Calif.-based Jazz Pharmaceuticals (JAZZ) had a wild ride today, rising as much as 16% before closing up 3%. The reason: The U.S. Food and Drug Administration said that the company's drug, known as Xyrem, effectively treats fibromyalgia, a disease that causes muscle pain and fatigue. The drug uses an ingredient called Gamma hydroxybutyrate or GHB.

Illegal forms of GHB became known not too long ago as the "date-rape" drug because it contains a sedative that has been illegally used in night clubs. Xyrem is also used for people suffering from narcolepsy, a sleep disorder.

What Next After Jazz?

Even though the FDA says the drug is useful for treating fibromyalgia, there are still some safety concerns regarding Xyrem. That could be based on GHB's influence on the central nervous system and reports that it has been linked to depression and other disorders.

Hilary Kramer, editor of, recently recommended that investors buy shares in Jazz Pharmaceuticals. In addition to Jazz, which has already had its run, she also says the time is right to buy shares of Dendreon (DNDN), a stock that has been on a roller-coaster ride recently, as well as shares of TranS1 (TSON).

For more on why Kramer likes Dendreon and TranS1, see the video:

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