These Two Marijuana Stock Market Picks Soared Last Week
This year has been an up-and-down time for marijuana stocks so far, with strong gains offset by blistering falls, all this often happening within 30 days of each other. But that’s the nature of the current marijuana stock market, and it’s something that all veteran marijuana investors should be used to by now. After all, this is a developing industry with a lot of its value tied to the political realm.
This brings us to two companies that have not only dominated the marijuana stock market, but may be likely to take in even bigger gains depending on how the U.S. healthcare bill shakes out.
Cara Therapeutics Rises High
Cara Therapeutics Inc (NASDAQ:CARA) has long been on the radar of most vigilant marijuana stock market watchers. The company is currently based more on the medical side of things when it comes to pot and has pushed a number of innovative treatments over the years.
As such, it is one of the better marijuana investments in that it has an already stable business that is a little bit more protected from the volatility of politics that, say, Canadian marijuana stocks are subject to at the moment.
But what really put CARA stock over the edge last week was its announcement that its most advanced experimental drug, “I.V. CR845” (a Kappa Opioid Receptor Agonist (KORA), which does not feature any cannabinoids) received a breakthrough therapy designation from the U.S. Federal Drug Administration in the treatment of chronic kidney disease.
This hit a particular needy part of the medical field, and as such, this naturally excited investors and boosted CARA stock by a whopping 38% last week. That momentum has carried into this week as well, nearly cracking 30% again. (Source: “Here’s Why These 2 Marijuana Stocks Skyrocketed 32% and 21% Last Week,” The Motley Fool, June 28, 2017.)
While it still may very well fail its final tests for approval, these are nonetheless good signs for the company. While it does not have a direct relationship with marijuana, being a marijuana stock with a profitable business outside cannabis is likely to raise its profile compared to other one-note pot sellers.
It’s also worth noting that the company has been on fire in 2017, gaining nearly 175%, while other marijuana producers have been victims of the marijuana bubble.
Insys Therapeutics Makes Waves
Insys Therapeutics Inc‘s (NASDAQ:INSY) gains were more fleeting and, by contrast to CARA stock, INSY stock is in a less solid position, but that still doesn’t wipe away its 23.5% gain last week.
The upshot came as a result of the addition of four pharmaceutical veterans to its management team. The move was a much-needed balm in order to calm investors as the company faces turmoil over its “SUBSYS” prescription debacle.
SUBSYS is a medicine that treats breakthrough cancer pain—and has nothing to do with marijuana—but has caused the company a long string of headaches. Allegations and lawsuits have been filed that suggest that up to 80% of the prescriptions for SUBSYS were filed for off-label indications and that Insys’ marketing may have been part of that misrepresentation. The concerns revolving around SUBSYS turned what was a profitable treatment into a quarterly loss.
The new blood that the company brought in helped polish what has otherwise been a dirtied public image. The company was not able to hold on to the full gains for long, however, as this week INSY stock tumbled nearly two percent.
Politics and the Marijuana Stock Market
As the U.S. wrestles over the future of its healthcare laws, the Senate released the latest version of the bill that faces their final approval before becoming law. It would effectively replace many parts of the Affordable Care Act and otherwise, once again, dramatically alter the health coverage system of the U.S.
As such, any companies operating in the health industry ought to be watching the bill closely for how its language will affect the sector. And investors should pay close attention as well.
Despite President Donald Trump claiming that he would attack price hiking in the biomedical sphere, there is little indication that this bill will set out any comprehensive legislation regarding drug negotiations. Beyond that, the bill also keeps in place many ACA Medicaid extensions, at least for the near term, meaning that biomedical companies will still be able to benefit from the current plans that expand coverage to more people.
The bill has yet to be finalized, nor is it even close to passing yet, so investors might want to keep an eye on healthcare reform if they’re looking to make biomedicine and marijuana investment plays.