There are many promising quit smoking drugs out there. Whoever develops one with Viagra-like marketing stickiness will have found the golden goose. If you have not heard of NicVAX, by NABI, then read here:
NicVAX has entered Phase III clinical trials, which means that it could still be years before doctors are prescribing it, which is exactly why I am covering it now. Even though the max coverage length on PT is 2 years, I believe any promising drug's entry into Phase IV will spell a boost for the stock even before it hits the pharmacists' shelves.
Especially one that supposedly cures smoking.
This is better than the fountain of youth. For 26 million Americans (source: http://www.quit-smoking.net/smoking-statistics.html) smoking is a habit that will take years off their lives. Don't forget that another 10 million use smokeless tobacco. Let's do some back of the envelope calculations: if just a third of tobacco users wish to quit and either have insurance that will cover it or are willing to pay for it, and if the lifetime earnings on each patient is just $100 -- both probably conservative estimates -- then this poses a potential market of over $1.2 billion. As of today, at $5 share price, this company currently makes almost no money at all.
Oh yeah, that's just the USA. The rest of the world smokes about 40x as much.
Sure, you have to consider how much of that target market NicVAX will seize. To that, I ask you to name more than two prescription ED drugs. With tens of millions in marketing (NABI has partnered with powerhouse GSK to launch NicVAX) and a little luck, easily half or more of that market could be NABI's. With all the competition in this space, this is essentially a lottery ball pick, but even if it doesn't end up owning the market, the hype could still drive the stock upward in the next two years.