One of My Top Small-Cap Biotech Picks Made a Move. Here’s How I Trade It

We have positive action on Monday morning, primarily due to lower oil and some optimism about the Iran situation. Breadth is running about 53% positive and the Magnificent Seven (MAGS) is breaking out to a new all-time high, primarily due to strength in Meta (META). What is most notable about MAGS is that none of the Mag7 names are at all-time highs.

I am not too trusting of the action, but we will see how we close. Strength on Monday morning is often faded, and with the negative seasonality I discussed earlier today, there will be additional pressure.

I’m not making any major moves right now, but I am focused on developing my shopping list and strategies. I have a long list of names I like, but my two favorite names are small-cap biotechnology names that I have discussed many times in the past. One is Xeris (XERS) and the other is Precigen (PGEN).

How I Am Trading Precigen

Although I hold many stocks for the longer term, I am not a buy-and-hold investor. I am an active investor that is constantly adjusting my positions. I wanted to provide some insight into the process I am using with PGEN.

Last Thursday I noticed two large blocks of Precigen crossing with the stock near all-time highs. There was a block of about 680,000 shares followed a little later by another block of 3.5 million shares. This is a stock that trades six or seven million shares on a typical day, so a single trade of 3.5 million is a lot of stock changing hands at once. I posted on X at the time that something was going on. The stock pushed through $8 to a new 52-week high late in the week and held most of the move into Friday on heavy volume.

This morning there was news that probably explains those big blocks. The Food and Drug Administration granted Precigen a platform technology designation for AdenoVerse, the technology that is used for its approved drug. I have no idea who was behind those blocks or which side was doing the buying, and a block by itself tells you nothing about direction. Big holders reposition for all kinds of reasons. But the stock was acting as if someone with size had a reason to own it, and now there is some obvious positive news that someone probably knew about last week.

For those who don’t follow it, Precigen makes Papzimeos, the first approved treatment for recurrent respiratory papillomatosis. It is a rare disease in which the HPV virus causes growths that keep coming back in the airway. Until the approval in August 2025 the only option for treatment was surgery, over and over, for years. The launch has gone much better than Wall Street expected. Second-quarter revenue came in at roughly double the consensus estimate, and the company turned profitable about two quarters earlier than it had guided.

Why the Platform Designation Matters

The platform designation is important because it means the technology can be expanded for other indications. AdenoVerse uses a modified gorilla adenovirus from actual gorillas. This is a cold virus that has been stripped of its ability to cause disease, repurposed to carry genetic instructions that teach the immune system to go after a specific target.

Papzimeos uses a delivery system that is in Phase 2 trials in combination with Keytruda from Merck & Co. (MRK) for HPV-related head and neck cancer and cervical cancer. The designation from the FDA says that the delivery system is well understood and reproducible, so Precigen can use the manufacturing and safety data it already built for Papzimeos rather than proving all of it again for every new product. It also gets earlier and more frequent conversations with the agency along the way.

None of this will produce immediate revenue but it opens the door for new products that have substantial markets. The markets for HPV-related cancers are far larger than a rare airway disease, and that is where the long-term value in this stock lives.

The FDA has been stingy with these designations. It has handed out only a handful since the program began, and the first one, to Sarepta Therapeutics (SRPT), was pulled a month later after patient deaths.

Why I Am Not Loading Up

So why am I not loading up? Because of a date on the calendar that has nothing to do with Precigen’s business and a great deal to do with how its stock trades.

On October 30, the FDA is scheduled to rule on INO-3107, a treatment for the same disease from Inovio Pharmaceuticals (INO). For much of the summer Precigen has traded like a mirror of Inovio’s chances. In August a single analyst upgrade of Inovio knocked roughly $480 million off Precigen’s market value in a week, at a time when the whole of Inovio was worth about $120 million. The following week Precigen took all of it back with no news from either company. That illustrates that people trading this stock react to Inovio headlines, and it has little to do with what Inovio can do to Precigen’s business.

At a conference on Sept. 11, Inovio’s CEO said the company expected to be negotiating its label with the FDA in September. The FDA does not spend its time working out the wording of a label for a drug it plans to reject. If Inovio is approved, I expect Precigen to get hit on the headline, and some of the folks who chased it to new highs last week will head for the exits at the same time.

In my view that would present a great buying opportunity. An approval does not give Inovio a functioning competitor for a long time. Precigen has full approval, while Inovio is seeking accelerated approval, which comes with the obligation to run another trial to confirm the benefit.

I reduced my PGEN position slightly last week, not because I’m worried about the stock but because I want to buy much more of it at a better price. If it falls on the Inovio news that will likely be a good time to ramp up my position.

I go through a similar process with all the stocks that I own. I discussed this further in my column on Saturday about how charts need catalysts to work.

At the time of publication, DePorre was long PGEN.