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This articles continues my focus on biotechnology stocks. I have included a table for each stock to aid us in staying on point. These biotech have an upside catalyst, making them great candidates for further diligence.

Gilead Sciences Inc. (NASDAQ:GILD), trading at about $45.00 per share, is a large cap ($33.72 billion) focused on discovering, developing, and commercializing drugs to treat life-threatening infectious diseases. It has 4 products on the market for the treatment of HIV infection in adults. It also markets Hepsera, an oral formulation for the treatment of chronic hepatitis B, and AmBisome, amphotericin B liposome injection to treat serious invasive fungal infections, to name a few.

It is also close to completing the acquisition of Pharmasset, Inc. (VRUS), which is researching nucleoside/tide analogs for the treatment of chronic hepatitis C virus (HCV) infection, an obvious parallel to GILD's work on the hepatitis B virus. Gilead has no fewer than 20 therapies in its pipeline, with 5 of these in Phase III. The company is adequately capitalized and has a manageable debt load. It has experienced no significant roadblocks and has an excellent management team on both the business and scientific fronts.

Gilead Sciences Inc.

Biotechnology Fundamentals

Pass

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

62.44

Current Ratio

2.76

Technical

Institutional Ownership %

89.20

Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) is a mid cap ($2.81 billion) and trading at around $44.00 per share. ONXX's focus is developing therapies that target the molecular mechanisms causing cancer. Its lead product includes Nexavar (sorafenib) tablets, a novel, oral multiple kinase inhibitor that targets proteins involved in tumor cell proliferation and the formation of new blood vessels in tumors. Onyx has solid collaborations with some heavy-weights in the major drug manufacturing industry and is well capitalized. Its debt load is light. The pipeline is excellent with multiple therapies in various stages including 10 in Phase III.

There is a small bump in the road: A competing treatment (Tivozanib) for patients with advanced renal cell cancer from AVEO Parmaceuticals, Inc. (NASDAQ:AVEO) may outperform Onyx's sorafenib (marketed as Nexavar). Nexavar is also a treatment for liver cancer and no studies have been undertaken as yet for Tivozanib with regard to liver cancer. This event is unlikely to have significant impact. Onyx seems to have a solid management team replete with M.D.'s and PH.D.'s. Rumors of acquisition may exert some upward pressure on the stock, but these are only rumors.

Onyz Pharmaceuticals, Inc.

Biotechnology Fundamentals

Pass

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

27.02

Current Ratio

11.06

Technical

Institutional Ownership %

95.00

Osiris Therapeutics, Inc. (NASDAQ:OSIR) is a small cap ($156.91 million), trading around $5.00. OSIR, a stem cell company, focuses on developing and marketing treatments for various medical conditions in the inflammatory, autoimmune, orthopedic, and cardiovascular areas. The firm operates in 2 segments, therapeutics, which focuses on developing biologic stem cell drug candidates from adult bone marrow which is a readily available and non-controversial source and bio-surgery which works to harness the ability of cells and unique constructs to promote the body's natural healing.

The company's lead biologic drug candidate is Prochymal, which is in Phase 2 and 3 clinical trails for various indications, including rejection, Crohn's disease, acute myocardial infarction, Type 1 diabetes, pulmonary disease, and gastrointestinal injury resulting from radiation exposure. Its biologic drug candidates also include Chondrogen, a preparation of adult undifferentiated mesodermal stem cells that is in Phase 2 clinical trials for osteoarthritis and cartilage protection. I was unable to find significant collaborations, even on Osiris' own website.

Capitalization and ability to meet current obligations seem adequate for the near term. One of Osiris' lead therapies, Prochymal, failed to produce the expected endpoint in the study of its use in treating Type 1 diabetes. Prochymal is also being tested as a treatment for a variety of other conditions, but this shotgun approach to achieving a result does not impress me. The management team seems to have the prerequisite M.D.'s and Ph.D.'s but I am disturbed by the fact that 54% of the company's stock is held by insiders. In my mind, this is a conflict of interest. Granted, this would not be my attitude if we were discussing any other industry, but this is a life and death industry where personal gain and the public good have no business colliding. I cannot recommend OSIR to you because of my fiduciary concerns as well as my concerns about the impact controlling insider interests may have on the direction of the company.

Osiris Therapeutics, Inc.

Biotechnology Fundamentals

Pass

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

-0-

Current Ratio

2.97

Technical

Institutional Ownership %

13.20

Human Genome Sciences Inc. (HGSI) is another small cap ($1.76 billion) trading near $9.00 per share. Currently, it is focused on therapies (BENLYSTA) for systemic lupus erythematosus and raxibacumab for inhalation anthrax, to name a few. Collaborations with GlaxoSmithKline PLC (NYSE:GSK) and others are well documented. Its recent offering and sale of about half a billion dollars worth of convertible senior notes does not really resolve the company's financial concerns, but does mitigate the pressure caused by the upcoming maturity of its convertible subordinated notes due on August 15, 2012. HGSI has 3 treatments in Phase III trials and is encountering no roadblocks thus far. The management team is solid. My greatest concern with this company is financial. I don't see them as an acquisition target, nor do I see it as having the resources to stay in the game long-term. I cannot recommend this equity as a "buy" at this time.

Human Genome Sciences Inc.

Biotechnology Fundamentals

Pass

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

116.88

Current Ratio

1.71

Technical

Institutional Ownership %

82.50

Inihibitex, Inc. (NASDAQ:INHX) is trading between $24 and $25. It is a small cap ($1.92 billion).

We won't spend any time analyzing this one because it is being acquired by Bristol-Myers Squibb Company (NYSE:BMY) for $2.5 billion. A real windfall for stockholders and makes the point that with great risk, great reward sometimes follows. There is a "fly in the ointment," however, in the form of a lawsuit; how much traction the litigation recieves remains to be seen. Insider ownership was not particularly high, and stockholders will receive almost 4 times the stock's 200 day moving average.

Dendreon Corp. (NASDAQ:DNDN) is a mid cap ($2.09 billion) trading at about $14.00 per share. The company's focus is drugs that enhance existing cancer treatment options for patients. The company offers active cellular immunotherapy and small molecule product candidates to treat various cancers. DNDN has one therapy, Provenge, for the treatment of prostate cancer, being actively marketed. There are other therapies in very early stages of development. My research revealed no major collaborations. The balance sheet looks pretty grim, and I see no immediate sources of capitalization. The company's management team is adequate, but there is a dearth of Ph.D.s in the roster. Probably the most damning piece I've read is this one, which portrays DNDN as having one of the worst returns of 2011. Dendreon Corp. is a no-go for me.

Dendreon Corp.

Biotechnology Fundamentals

Pass

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

187.07

Current Ratio

1.13

Technical

Institutional Ownership %

94.00

Life Technologies Corporation (NASDAQ:LIFE) is trading near $46.00 per share. This mid cap ($8.21 billion) is focused on providing scientific researchers and commercial markets the tools to accelerate scientific exploration. Life Technologies' customers rely on them to deliver a range of products and services, including systems, instruments, reagents, software, and custom services. The company owns approximately 4,000 patents and exclusive licenses. The table below is still applicable to LIFE because the company is not involved in the direct development of therapies like my recent biotech picks, but it is stable supplier for reseach operations. This company should be analyzed in traditional terms which would define this stock as a hold.

Life Technologies Corporation

Biotechnology Fundamentals

Pass

Research Focus

X

# of Products (Pipelines)

X

Collaborations

N/A

Capitalization

X

Debt Load

X

Products Nearing Market

X

Roadblocks

X

Management Team

X

Fundamentals

Debt/Equity Ratio

59.96

Current Ratio

1.32

Technical

Institutional Ownership %

94.00

Source: 5 Risky Biotech Stocks To Avoid, 2 To Consider