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June 17, 2007 Stock Pick: Novacea, Inc. (NOVC)

Stock Price: $10.27

Novacea, Inc. is a biopharmaceutical company focused on in-licensing, developing and commercializing therapies for the treatment of cancer. The company's lead product candidate is Asentar, a promising prostate cancer drug currently in Phase III clinical trials for the treatment of glioblastoma multiforme.

NOVC recently ran to over $17.00 from the $7.00 level after the company announced a lucrative partnership deal with pharmaceutical giant, Schering-Plough. The deal is potentially worth over $500 million to jointly develop Novacea's Asentar.

We expect further positive news out of NOVC. Considering the Schering-Plough deal, we believe NOVC is significantly undervalued down at a market cap of only around $238 million.

NOVC has a strong balance sheet with over $56 million in cash and short-term investments on the balance sheet as of March 31, 2007.

NOVC's chart has corrected from its high and is now stabilizing for another possible run higher.

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