The Drug Doctors Reach For First

There is a leukemia called relapsed NPM1-mutated AML.

It comes back after chemotherapy, and when it does, the options run out fast.

Kura Oncology (KURA) got a pill approved for it late last year. One a day, taken at home.

In the second quarter, about 115 new patients started on it, up 35% in three months, and revenue grew 57% to $9.1 million. When an oncologist diagnoses this now, that pill is what they reach for more often than anything else on the shelf.

Nine months from launch, and it owns the category.

Then the stock fell 10% in five sessions.

Look at what else is going on in this market.

Semiconductors are breaking down underneath the index. XSD is below its 50-day, and the percentage of semis above their own 50-days keeps deteriorating. Breadth across the S&P has gone from about 55% of stocks above their 50-day to roughly 45% in a matter of days.

Healthcare is the exception, holding bullish 20-day, 50-day, and 200-day trends, bouncing off its 20-day, with biotech outperforming into what is seasonally a strong stretch for the group.

So the money leaving cyclical and technology names has somewhere to go, and it’s going into the one place that still has a trend under it.

15% of the float is short, which works out to 13.2 million shares borrowed and sold by people betting against it.

On a biotech with a commercial product taking share, that’s a lot of people who need to buy it back if the news keeps going the right way.

And there’s news coming. Kura presents at three investor conferences this month, including Morgan Stanley's Global Healthcare Conference on September 16th.