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I’ll kick off this week’s reviews with another look at Omrix Biopharmaceuticals Ltd. (Nasdaq:OMRI). It specializes in the development and manufacture of surgical sealants. Put more simply, its products stop severe bleeding during surgery. It is working in this field in partnership with Johnson & Johnson (NYSE:JNJ) subsidiary Ethicon Inc. It is a field which all agree is growing rapidly, and which will offer phenomenal opportunities to those companies that can deliver breakthrough solutions.

Another interesting field that Omrix is engaged in is vaccines. It is focusing on the development of immunotherapy products. One of its current developments is HT-VIG, a focused antibody for the treatment of smallpox. The company aims to find niches within the healthcare industry in which the product is lacking.

Founded in 1995 by US businessman Robert Taub, a manager with an extensive record of founding and managing healthcare and semi-healthcare companies, Omrix was floated exactly eight months ago in April. The stock started off at $10, after the IPO raised $35 million, including the “over allotment” after the public offering (green shoe options). Last Friday, Omrix held a second offering, at a price of $32 a share, which will also include a sale offer by existing shareholders. Excluding the sale offer by existing shareholders, the company expects to raise $44.4 million from the latest offering.

I must confess, ashamedly, that this is the first time that I have taken notice of this company. Over its last three quarters, Omrix increased its net profit to sales ratio from 28% to 32% and then 44%. This is a situation that requires constant monitoring and I intend to do so from this point onward. Omrix’s current net profit to sales ratio stands at $16.8/54 million, with profit margins currently at 31% and rising. Fantastic.

Four of five analysts recommend buying the stock at its current price, compared to just one two months back. To sum up - this is a fantastic field, and Omrix is an excellent company with an outstanding management team. So what more do we need? Just that the stock tapers off slightly so that I can make an entry at slightly fairer prices. As it happens, the price could indeed fall as a result of last week’s secondary offering and if that happens, Omrix will definitely be one to go for.

Published originally by Globes [online], Israel business news - www.globes.co.il
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006. Republished on Seeking Alpha with full permission.

Source: Omrix's Secondary May Make It A Buy