'ASCO effect' drives up shares of troubled OXiGENE

Call it ASCO fever. Investors tend to get extra excited about cancer drug developer stocks around the time of the annual American Society of Clinical Oncology meeting in June. This year's top beneficiary of what TheStreet's Adam Feuerstein calls the "ASCO effect" is OXiGENE ($OXGN).

That's right, OXiGENE, a South San Francisco-based developer that wrapped up the first quarter ending March 31 with only $2.7 million in cash on hand and whose auditors last year raised doubts about its ability to continue as a going concern. Still, as Feuerstein writes this morning, OXiGENE's stock has shot up more than 300 percent since April 18, when ASCO published online the title of abstracts that will be presented during its annual meeting next month in Chicago. The stock closed at $5.14 per share on Wednesday, up from just $1.55 on April 18, according to Yahoo Finance. While not as steep as OXiGENE's rise, Feuerstein points out, multiple small cancer drug developers such as Vical ($VICL), Oncothyreon ($ONTY) and Synta Pharmaceuticals ($SNTA) have also seen jumps in their stock prices as of late.

OXiGENE is expected to present data at the ASCO meeting from two trials of its experimental drug Zybrestat (fesbretabulin) in combination with chemotherapy for patients with anaplastic thyroid cancer and non-small cell lung cancer. Neither of these two studies is expected to be a showstopper in the oncology community. "But the stock is nonetheless performing exceedingly well because traders like OXiGENE's penny-stock market cap of just under $30 million, the low float of 5 million shares and the simple fact that OXiGENE will have a presence at ASCO," Feuerstein writes.

Where will OXiGENE's stock price be after the big ASCO confab concludes on June 7? Feuerstein writes that the "ASCO effect," as one might guess, has tended to fade in past years after the meeting ends.

- read Feuerstein's piece