Drug maker Affymax Inc (NASDAQ: AFFY) is having a pocket pivot in today's trade if it can close in the top half of its trading range.
AFFY develops peptide-based drugs that combat anemia associated with chronic renal failure. AFFY recently secured a supply agreement with a German provider of dialysis treatments through 2,898 clinics in over 40 countries, Fresenius Medical Ads (NYSE: FMS). It is a positive step in AFFY’s attempts to penetrate the dialysis segment, and some analysts believe this could make AFFY a takeover target.
AFFY recently had a very strong trendline breakout on huge volume and, after running up sharply, the stock has formed a short, tight flag as volume declines, indicating that investors are not willing to dump the stock here despite a rocky general market environment.
AFFY has had no earnings up until its most recent quarter. Thus it carries more risk that the larger, more established companies such as Biogen (BIIB). That said, with greater risk comes more potential reward when the company’s fundamentals and product pipeline show strong promise.
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