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Since my Part I and Part II articles titled "3 Speculative Healthcare Companies With High Levels Of Insider Ownership", there have been some noteworthy developments in three of these companies.

On March 19, Acasti Pharma (ACST) announced encouraging preliminary clinical data of its "Randomized, Open-Label, Dose-Ranging, Multi-Center Trial to assess the Safety and efficacy of NKPL66 (CaPre) in the treatment of mild-to-high hypertriglyceridemia". Data from 157 patients who have completed four weeks of treatment with 0.5, 1, 2 or 4 grams of CaPre per day were assessed and CaPre achieved a clinically important and statistically significant triglyceride reduction of up to 23% (p < 0.05) as compared to standard of care, after only a 4-week treatment.

On March 18, there was an article published on Seeking Alpha by The Swiss Trader. The Swiss Trader wrote: "Furthermore, as what can be seen as the first major victory in the regulatory overhaul, Congress officially passed a bill that would affirm a safe and reliable domestic supply of radioisotopes: The American Medical Isotope Production Act (S.99). The bill was signed into law on January 2, 2013."

Advanced Medical Isotope Corporation (OTCQB:ADMD) has two solutions for this problem.

1. AMIC's Proprietary Hybrid Accelerator is a subcritical assembly system.

2. Potential AMIC-MURR Joint Venture ("Mo Moly") utilizes existing Missouri University Research Reactor to produce Mo-99.

Each Solution set has the potential to provide up to 50% of U.S. domestic requirements of Mo-99.

On March 26, 2013 Advanced Medical Isotope entered into a strategic alliance with GSG International GMbH to collaborate in the joint development of technologies for the production of medical isotopes and the marketing and distribution of related isotopes, equipment and services.

The first endeavor of the strategic alliance will be the worldwide distribution of Molybendum-99 and related Technetium-99 generators and kits acquired or manufactured by GSG on behalf of the Alliance. Advanced Medical Isotope initially will have exclusive rights for sale and distribution in North America, South America and China.

Market development and distribution arrangements generally do not require material capital investment and can provide an expedited path to revenue and profit, while expanding the marketing opportunities for Advanced Medical Isotope's proprietary products.

There was also some insider buying in Advanced Medical Isotope Corporation. James Katzaroff, founder, CEO, and chairman of Advanced Medical Isotope Corporation, purchased 158,333 shares on February 26 - March 15 and currently holds 2,306,834 shares or 2.8% of the company. Also, Leonard Jolliff, who joined Advanced Medical Isotope Corporation as Chief Financial Officer in 2006, purchased 33,333 shares on March 15 and currently holds 4,033,333 shares or 4.9% of the company.

IGI Laboratories (IG) is currently trading 37.2% higher than on March 11 when I first introduced the company. IGI presented at the 25th Annual Roth Conference on Wednesday, March 20. There was some insider buying in IGI as well. James Gale, a director of the company, purchased 10,000 shares on March 13 and currently holds 14,624 shares or less than 0.1% of the company. Michael Hemric, a director of the company, purchased 20,637 shares on March 6-12 and currently holds 23,522 shares or less than 0.1% of the company. Joyce Erony, a director of the company, purchased 17,500 shares on March 12-13 and currently holds 22,849 shares or less than 0.1% of the company.

In this article, I will have a look at three additional healthcare companies with over 50% insider ownership.

1. Durata Therapeutics (DRTX), a pharmaceutical company, focuses on the development and commercialization of novel therapeutics for patients with infectious diseases and acute illnesses.


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Insider Ownership

The company has a 70.39% insider ownership. There have been seven insider buy transactions and there have not been any insider sell transactions since July 2012.

Financials

The company reported the full year 2012 financial results on March 8 with the following highlights:

Revenue $0
Net loss $62.5 million
Cash $45.3 million

Outlook

With the completion of both of its Phase III studies, the company is on track to submit its NDA with the FDA in mid-year and the MAA with the EMA at year-end 2013.

Competition

Durata's potential competitors include large pharmaceutical and biotechnology companies, and specialty pharmaceutical and generic drug companies. Here is a table of these companies and their approved drugs.

Company Approved drugs
Pfizer (PFE) Zyvox (linezolid) and Tygacil (tigecycline)
Cubist Pharmaceuticals (CBST) Cubicin (daptomycin)
Theravance (THRX) Vibativ (telavancin)
Forest Laboratories (FRX) Teflaro (ceftaroline)
Sanofi-Aventis (SNY) Targocid (teicoplanin)
Others (generic producers) generic vancomycin

Further, Durata expects that product candidates currently in late stage development, or that could enter late stage clinical development in the near future, may represent significant competition if approved. Here is a table of these companies and their drugs in development.

Company Drugs in development
The Medicines Company (MDCO) oritavancin
Trius Therapeutics (TSRX) tedizolid phosphate
Cempra (CEMP) fusidic acid
Rib-X Pharmaceuticals (RBIX) delafloxin
Paratek Pharmaceuticals PTK 0796
Nabriva Therapeutics AG BC-3781
Tetraphase Pharmaceuticals (TTPH) TP-434
Furiex Pharmaceuticals (FURX) JNJ-Q2

Many of these companies may have significantly greater resources than Durata. If approved, Durata believes that dalbavancin's features, including its convenient dosing, compliance and efficacy with respect to Methicillin-Resistant Staphylococcus aureus, will differentiate it from existing products currently marketed for the treatment of acute bacterial skin and skin structure infections.

My analysis

The company has a 70.39% insider ownership. There are four analyst buy ratings, zero neutral ratings and zero sell ratings, with an average target price of $15.50. The next two major catalysts for the stock will be the NDA submission with the FDA in mid-year and the MAA with the EMA at year-end 2013. If dalbavancin will be approved early next year, I believe the stock could reach the $15.50 price target.

2. Retractable Technologies (RVP) designs, develops, manufactures, and markets safety syringes and other safety medical products for the healthcare industry in the United States and internationally.


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Insider Ownership

The company has a 67.45% insider ownership. There have been one insider buy transaction and there have not been any insider sell transactions during the past 12 months.

Financials

The company reported the third-quarter financial results on November 15 with the following highlights:

Revenue $9.4 million
Net loss $0.5 million
Cash $25.0 million
Debt $4.2 million
Net cash per share $0.76

Competition

Retractable Technologies' competitors include Becton, Dickinson and Company (BDX) and Covidien (COV). Here is a table comparing these companies.

Company RVP BDX COV Industry Average (Medical Instruments & Supplies)
Market Cap: 28.64M 17.90B 30.88B 179.04M
Employees: 144 29,555 43,400 377.00
Qtrly Rev Growth (yoy): 0.14 0.04 0.06 0.11
Revenue: 31.71M 7.78B 12.01B 91.88M
Gross Margin: 0.33 0.52 0.57 0.53
EBITDA: -3.05M 2.13B 3.25B 6.17M
Operating Margin: -0.14 0.21 0.22 0.03
Net Income: -5.20M 1.13B 1.90B N/A
EPS: -0.21 7.48 3.94 N/A
P/E: N/A 12.34 16.63 20.85
PEG (5 yr expected): N/A 2.11 1.67 1.33
P/S: 0.90 2.30 2.57 2.52

Retractable Technologies is trading below the industry average P/S ratio.

My analysis

The company has a 67.45% insider ownership. The company has a net cash position of $0.76 per share, which should act like a support for the stock. The company's current enterprise value is just $14.8 million with annual revenues of $31.7 million. I believe the stock could be a good pick at around $1 level.

3. Taro Pharmaceutical Industries (TARO) engages in the research, development, production, and marketing of pharmaceutical products primarily in the United States, Canada, and Israel.


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Insider Ownership

The company has a 65.84% insider ownership. Sun Pharmaceutical Industries is the largest shareholder of Taro with a 65.8% ownership.

Financials

The company reported the third-quarter fiscal 2013, which ended December 31, 2012, financial results on February 4 with the following highlights:

Revenue $185.7 million
Net income $88.8 million
Cash $486.6 million
Debt $28.3 million

FDA Approvals and Filings

During the quarter, the company filed one ANDA with the FDA. With this latest filing, ANDAs representing seventeen products as well as two NDAs await FDA approval.

Competition

Taro's competitors include Perrigo (PRGO) and Teva Pharmaceutical Industries (TEVA). Here is a table comparing these companies.

Company TARO PRGO TEVA Industry Average (Drug Manufacturers - Other)
Market Cap: 2.64B 10.92B 34.98B 124.65M
Employees: N/A 8,800 45,948 106.00
Qtrly Rev Growth (yoy): 0.25 0.05 -0.08 0.29
Revenue: 688.44M 3.26B 20.32B 67.42M
Gross Margin: 0.73 0.36 0.53 0.75
EBITDA: 388.14M 782.05M 6.02B -1.43M
Operating Margin: 0.54 0.20 0.21 0.04
Net Income: 248.51M 434.31M 1.96B N/A
EPS: 5.58 4.70 2.25 N/A
P/E: 10.55 24.72 18.14 22.20
PEG (5 yr expected): N/A 1.77 1.22 0.62
P/S: 3.83 3.35 1.72 3.53

Taro is trading below the industry average P/E ratio.

My analysis

The company has a 65.84% insider ownership. The stock is trading at a P/E ratio of 10.55 and the company has a book value of $18.96 per share. The stock has a $61 price target from the Point and Figure chart. The current market price is just $2 shy of its $61 price target, which makes me only cautiously bullish on the stock currently.

Source: 3 Speculative Healthcare Companies With High Levels Of Insider Ownership - Part III