Many biotechs have made substantial moves in 2012. Some of them have gone up 100% or more at times. Others have gone down as much as 80% or more. Positive management comments or positive clinical data can send these stocks flying high fast, but many of them are poorly capitalized, overpriced, or have low prospects, which cause the opposite effect, sending shares downward as management struggles to raise capital. One way to help navigate the biotech mind field while searching for good prospects is to perform a screen.
I performed a screen for U.S.-based biotechs that have over $10 million in positive equity, that trade between $5 and $10, and have a market cap over $150 million and under $300 million. The equity lowers the risk of a secondary offering coming any time soon as it typically suggests a well capitalized name. Being over $5 with over $150 million market cap helps eliminate those that the street considers to have low prospects while still being under $10 and under a $300 million market cap still leaves room for the potentially high returns often seen in biotechs.
The result of the screen is below. It's a great start to look for that next hot biotech while mitigating some of the balance sheet risk that often accompanies biotechs while still leaving room for possible large gains.
ACADIA Pharmaceuticals (NASDAQ:ACAD)
ACAD focuses on small molecule drugs that address unmet medical needs in neurological and related central nervous system disorders. It has over $17 million in equity, recently closed at $5.12, and has a market cap of $289 million. I have previously touched on ACAD in an article when it nearly tripled in a single day on positive Phase III top-line trial results.
AVEO Pharmaceuticals (NASDAQ:AVEO)
AVEO, a cancer therapeutics company, engages in discovering, developing and commercializing targeted cancer therapies using its Human Response Platform. Its lead product candidate, Tivozanib, which in Phase III clinical development stage, is a small molecule oral cancer drug to prevent tumor growth by inhibiting angiogenesis. It has over $138 million in equity, recently closed at $6.49, and has a market cap of $284 million.
BioMimetic Therapeutics (NASDAQ:BMTI)
BMTI engages in the development and commercialization of products for the healing of musculoskeletal injuries and diseases. It offers therapies for orthopedic, sports medicine, and spine applications. It has over $39 million in equity, recently closed at $7.54, and has a market cap of $213 million.
Celsion Corporation (NASDAQ:CLSN)
CLSN engages in the development and commercialization of targeted chemotherapeutic oncology drugs based on its proprietary heat-activated liposomal technology. The company develops ThermoDox, a liposomal encapsulation of doxorubicin, which is under Phase III clinical trial for primary liver cancer; under phase II clinical trial for colorectal liver metastasis; and under phase II clinical trial for treatment of recurrent chest wall breast cancer. It has over $13 million in equity, recently closed at $7.76, and has a market cap of $272 million. CLSN was the subject of a feature article twice from me. I outlined 5 Reasons To Be Bullish On CLSN Now in the first article and then 5 More Reasons To Be Bullish On CLSN Now.
Amicus Therapeutics (NASDAQ:FOLD)
FOLD focuses on the discovery, development, and commercialization of orally administered, small molecule drugs for the treatment of lysosomal storage disorders and diseases of neurodegeneration. Its drugs are known as pharmacological chaperones, which selectively bind to the target protein, enhance the stability of the protein, help it fold into the three-dimensional shape, as well as allow proper trafficking of the protein, thereby increasing protein activity, enhancing cellular function, and reducing cell stress. It has over $76 million in equity, recently closed at $5.79, and has a market cap of $286 million.
NewLink Genetics Corporation (NASDAQ:NLNK)
NLNK focuses on discovering, developing and commercializing immunotherapeutic products to enhance cancer treatment options for patients and physicians. Its portfolio includes biologic and small-molecule immunotherapy product candidates based on proprietary HyperAcute immunotherapy technology for the treatment of various oncology indications. It has over $23 million in equity, recently closed at $11.75, and has a market cap of $276 million.
Raptor Pharmaceuticals (NASDAQ:RPTP)
RPTP is dedicated to speeding the delivery of new treatment options to patients by working to improve existing therapeutics through the application of highly specialized drug targeting platforms and formulation expertise. Its clinical stage development products include DR Cysteamine, which is in phase IIb for the treatment of cystinosis; phase IIa for the non-alcoholic steatohepatitis; and phase II for the treatment of Huntingtons disease. It has over $26 million in equity, recently closed at $5.31 and has a market cap of $274 million.
Disclosure: I am long CLSN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.