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This article focuses on biotechnology stocks. I have included a table for each stock which will aid us in staying on point.

Repros Therapeutics Inc. (RPRX) is a small cap ($56.78 million) trading between $4.00 and $5.00 per share. Repros Therapeutics Inc., a development stage biopharmaceutical company, focuses on the development of oral small molecule drugs for the treatment of male and female reproductive disorders. Its lead drugs are Proellex, which is in Phase III clinical trials, and Androxal, which aids normal testosterone production in men and has implications for treatment of Type 2 diabetes.

RPRX also has Vasomax, an erectile dysfunction treatment that is phentolamine based and widely marketed in Latin America. It has yet to receive FDA approval for sale in the United States but is being marketed in other countries and generating revenue. I could find no evidence of any partnerships or collaborations with Repros Therepeutics Inc. and a quick read of this article may shed some light on that for you. Repros is sitting on roughly $3 million in cash but I see no evidence of anything in the offing to sustain the company long-term. Given the critical nature of collaboration and the ability to raise capital and Repros’ failure to pass these key tests, I would not risk an investment in this company.

Repros Therapeutics Inc.

Biotechnology Fundamentals

Pass

Fail

Research Focus

X

# of Products (Pipelines)

X

Collaborations

X

Capitalization

X

Debt Load

X

Products Nearing Market

X

Roadblocks

X

Management Team

X

Fundamentals

Debt/Equity Ratio

Zero

Current Ratio

3.55

Technical

Institutional Ownership %

45.10

Seattle Genetics Inc. (SGEN) is trading between $17 and $18.00 is trading between $17 and $18.00 share. It is a mid cap ($2 billion) and its research focus revolves around creating monoclonal antibody-based therapies for the treatment of cancer and autoimmune disease. At the risk of sounding cold, these are highly profitable areas for any successful therapy. The company has 5 treatments in the works with the lead product, SGN-35, in pivotal trial for patients with relapsed or refractory hodgkins lymphoma under a special protocol assessment.

Seattle Genetics has multiple collaborations with significant players in the major drug manufacturing industry. The firm is adequately capitalized, has zero long term debt and a current ratio of 5.23. SGEN has treatments in virtually all clinical trial phases from initial through phase III. To date, there have been no roadblocks. The management team has impressive academic credentials and this extends to the board of directors as well. Investment in any biotechnology stock represents a risk-- but with great risk, great reward sometimes follows. This stock is worthy of your consideration.

Seattle Genetics Inc.

Biotechnology Fundamentals

Pass

Fail

Research Focus

X

# of Products (Pipelines)

X

Collaborations

X

Capitalization

X

Debt Load

X

Products Nearing Market

X

Roadblocks

X

Management Team

X

Fundamentals

Debt/Equity Ratio

Zero

Current Ratio

5.23

Technical

Institutional Ownership %

112.40

PDL BioPharma, Inc. (PDLI) is trading at just over $6.00 per share and has a market cap of $857.18 million, defining it as a small cap. It is also a small company with just 8 employees. PDLI is a matured-- one might even say retired-- biotechnology company. Having been there and done that, it now occupies its days engaged in the management of antibody humanization patents and royalty assets. The company licenses its technologies to make and sell antibodies that bind to respiratory syncytial virus, as well as antibodies that bind to the alpha subunit of the VLA-4 integrin.

As a result, we must look at PDL BioPharma in the same way we might analyze a stock in the consumer goods or any other sector. PDLI has a price/earnings ratio of 8.08 and a price/earnings growth ratio of 0.37. Price to book and return on equity are not available as stockholder equity is in the negative. PDLI’s management took positive action against further dilution of shareholder value quite recently, but sooner or later this piper must be paid. Quarterly year-over-year revenue growth is a negative 3.14% and quarterly year-over-year earnings growth is positive at 14.30%. The company’s current ratio is 1.26. In summary, I believe this stock to be more risk than reward. It does offer a healthy dividend yield of 9.80% against a payout ratio of 58%, but I view this as more bribe than blessing.

Neurocrine Biosciences, Inc. (NBIX) trading at about $8.00 is a small cap ($451.44 million) engaged in the discovery and development of drugs for the treatment of neurological and endocrine-related diseases. The company develops drugs for endometriosis, anxiety, depression, pain, diabetes, irritable bowel syndrome, insomnia, and other neurological and endocrine related diseases and disorders. It has several treatments in various stages of development.

The firm enjoys a number of partnerships and alliances with some very prestigious companies. The company is well capitalized, receiving advance payment from Abbott Laboratories (ABT) for rights to Neurocrine’s lead drug, elagolix. NBIX has no debt and its current ratio of 2.81 is testimony to its ability to handle current obligations. The company has 3 treatments in phase II trials and has experienced no significant roadblocks. The management team is rife with Ph.D.s and M.D.s, which is what we expect to see in this industry. Given NBIX’s passing grades and prestigious alliances, I would be comfortable owning this stock.

Neurocrine Biosciences, Inc.

Biotechnology Fundamentals

Pass

Fail

Research Focus

X

# of Products (Pipelines)

X

Collaborations

X

Capitalization

X

Debt Load

X

Products Nearing Market

X

Roadblocks

X

Management Team

X

Fundamentals

Debt/Equity Ratio

Zero

Current Ratio

2.81

Technical

Institutional Ownership %

66.70

NPS Pharmaceuticals, Inc. (NPSP) currently trading between $6 and $7 per share is a small cap ($544.03 million) and engaged in developing treatments for gastrointestinal and endocrine disorders. NPS is ahead of the curve with several treatments already in the marketplace. It has three significant treatments in various stages of development. The firm has collaborative partners. Given the fact that it is producing some income from drugs already on the market, I would rate its capitalization as adequate-- I believe it has the ability to handle its debt load. It has at least one new product nearing market, and although there was a roadblock encountered when three of its test subjects succumbed to cancer, it was determined that the drug (Gattex) was in no way responsible. The management team has exceptional credentials, extending to those with financial and legal responsibilities. I like what I see in NPS Pharmaceuticals, Inc. and would recommend it for your consideration.

NPS Pharmaceuticals, Inc.

Biotechnology Fundamentals

Pass

Fail

Research Focus

X

# of Products (Pipelines)

X

Collaborations

X

Capitalization

X

Debt Load

X

Products Nearing Market

X

Roadblocks

X

Management Team

X

Fundamentals

Debt/Equity Ratio

N/A

Current Ratio

5.52

Technical

Institutional Ownership %

93.80



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 3 Biotech Stocks To Buy, 2 Avoid This Year