Why Progenics Pharmaceuticals, Inc. Jumped This Morning

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Progenics Pharmaceuticals were up this morning after Needham & Company upgraded the biotechnology company to buy from hold.

So what: Along with the upgrade, analyst Chad Messer, Ph.D. planted a price target of $8 on the stock, representing about 67% worth of upside to Friday's close. While investors might be turned off by last week's bit of very bad news -- an abstract revealed the death of two patients during mid-stage trials of its experimental prostate cancer antibody-drug conjugate, PSMA-ADC -- Messer thinks that Progenics is too juicy to pass up given the positive data it presented at the American Society of Clinical Oncology GU Cancers Symposium.

Now what: According to Needham, Progenics' risk/reward trade-off is pretty attractive at this point. "Progenics presented positive data from two Phase II studies at ASCO-GU, including one from a PSMA-ADC therapeutics agent and a PSMA imaging agent," Messer noted. "We believe that these data validate the company's strategy of refocusing resources on cancer and making a big investment in the novel prostate cancer target PSMA. In particular, we believe the imaging agent could progress rapidly into Phase III testing and become a near-term value driver for PGNX shares." So while PSMA's toxicity concerns make Progenics far too risky for average investors, biotech-savvy contrarians might want to take a closer look at Needham's turnaround call.

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The article Why Progenics Pharmaceuticals, Inc. Jumped This Morning originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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