By Alexander Moschina
After it was almost kicked off the Nasdaq in 2010, there was nowhere to go but up for Repros Therapeutics Inc. (Nasdaq: RPRX). Currently, the stock is trading more than 1,400% above its 52-week low of $0.36 per share (partially fueled by a reverse stock split back in October). And thanks to a better-than-expected earnings report, the Texas company shot 10% higher on April 14.
Net loss for the year was just $4.8 million – a vast improvement over a previous loss of $27.2 million. Of course, when a company’s ascent is fueled by earnings, a quick drop in share price is never far behind.
So the question is: Does this tiny company have what it takes to stay on top?
Repros’ Fertility Treatments Set to Explode Profits by $6 Billion
As my colleague, Marc Lichtenfeld says, the second phase of FDA approval is the “sweet spot” of biotech investing. That’s when companies test their treatments on groups of 100 or more – a major step in any clinical trial. And it’s double the excitement for Repros; the company currently has two products awaiting phase II approval:
Proellex treats uterine fibroids and endometriosis. The market for women’s reproductive system disorders is worth more than $5 billion.
Androxal is a male fertility treatment that helps increase testosterone levels. The global market for male endocrine disorders is worth more than $1 billion.
FDA approval for either candidate would absolutely explode Repros’ current $65 million market cap. But it gets better. Because it turns out Androxal may also effectively treat type 2 diabetes.
The Market for Androxal Could Grow 2,000%
The company discovered early on that 20% of its test subjects also happened to be diabetics. Further research confirmed that there is a correlation between endocrine disorders and type 2 diabetes. So in 2010, Repros applied for – and was approved to conduct – a study that will determine if Androxal can affect blood-glucose levels. The size of this treatment market? $20.5 billion in 2009. And research firm, Decision Resources predicts it will reach $36 billion over the next ten years.
Repros is planning to release the results of its study in late 2011. If favorable – a likely scenario – shares will surely blast higher. Of course, further testing will be required. But this could officially open doors to a brand new treatment market.
As with any biotech, there’s guaranteed to be a whole lot of wait-and-see. But the data Repros has compiled so far is encouraging. And the fact is, this company’s pipeline currently holds two potential game-changers.
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