Interested in biotechnology companies? Do you prefer companies with high liquidity? Do you prefer investing in stocks that analysts have weighed in on? We ran a screen you might find helpful.
The Current ratio is a liquidity ratio used to determine a company's financial health. The metric illustrates how easily a firm can pay back its short obligations all at once through current assets. A company that has a Current ratio of one or less is generally a liquidity red flag. Now this doesn't mean the company will go bankrupt tomorrow, but it also doesn't bode well for the company, and may indicate that it could have an issue paying back upcoming obligations.
The Quick ratio measures a company's ability to use its cash or assets to extinguish its current liabilities immediately. Quick assets include assets that presumably can be converted to cash at close to their book values. A company with a Quick Ratio of less than 1 cannot currently pay back its current liabilities. The quick ratio is more conservative than the Current Ratio because it excludes inventory from current assets, since some companies have difficulty turning their inventory into cash. If short-term obligations need to be paid off immediately, sometimes the current ratio would overestimate a company's short-term financial strength. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets).
We first looked for biotechnology stocks. From here, we then looked for companies that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We then looked for companies that analysts rate as "Buy" (2 < mean recommendation < 3). We did not screen out any market caps.
Do you think these stocks will continue to see such strong profitability? Please use our list to assist with your own analysis.
1) BioMarin Pharmaceutical Inc. (BMRN)
BioMarin Pharmaceutical Inc. has a Current Ratio of 4.28 and Quick Ratio of 3.25 and Analysts' Rating of 1.70. The short interest was 9.60% as of 05/24/2012. BioMarin Pharmaceutical Inc. develops and commercializes biopharmaceuticals for serious diseases and medical conditions in the United States, Europe, Latin America, and rest of the world.
The company's commercial products include Naglazyme, a recombinant form of N-acetylgalactosamine 4-sulfatase enzyme used for the treatment of mucopolysaccharidosis (MPS) VI; Kuvan, a proprietary synthetic oral form of 6R-BH4 used to treat patients with phenylketonuria (PKU), a metabolic disease; Aldurazyme used for the treatment of mucopolysaccharidosis I, a genetic disease; and Firdapse used to treat Lambert Eaton Myasthenic Syndrome, an autoimmune disease.
BioMarin develops GALNS, an enzyme replacement therapy for the treatment of MPS IVA, a lysosomal storage disorder; PEG-PAL, an enzyme substitution therapy that is under Phase II clinical trial to treat PKU; BMN-673, a Phase I/II clinical trial product for the treatment of cancer; BMN-701, an enzyme replacement therapy, which is under Phase I/II clinical trials for Pompe disease, a glycogen storage disorder; and BMN-111, a peptide therapeutic that is under Phase I clinical trial for the treatment of achondroplasia.
2) Cadence Pharmaceuticals Inc. (CADX)
Cadence Pharmaceuticals Inc. has a Current Ratio of 5.48 and Quick Ratio of 5.36 and Analysts' Rating of 2.10. The short interest was 13.02% as of 05/24/2012. Cadence Pharmaceuticals, Inc., a biopharmaceutical company, focuses on acquiring, in-licensing, developing, and commercializing proprietary product candidates principally for use in the hospital setting in the United States and Canada.
Cadence holds the rights to the OFIRMEV injection, a proprietary intravenous formulation of acetaminophen for the management of pain and reduction of fever in adults and children. The company in-licenses rights to OFIRMEV from Bristol-Myers Squibb Company, which sells intravenous acetaminophen in Europe and other markets for the treatment of acute pain and fever under the Perfalgan brand name.
3) CEL-SCI Corp. (CVM)
CEL-SCI Corp. has a Current Ratio of 4.57 and Quick Ratio of 3.90 and Analysts' Rating of 2.00. The short interest was 4.17% as of 05/24/2012. CEL-SCI Corporation researches and develops drugs and vaccines. The company's lead product, Multikine, is under the Phase III clinical trials for the treatment of head and neck cancer. Multikine is an immunotherapeutic agent consisting of a mixture of cytokines that produces an anti-tumor immune response.
The company also develops Ligand Epitope Antigen Presentation System (LEAPs), a heteroconjugate technology that stimulates the human immune system to fight bacterial, viral, and parasitic infections, as well as autoimmune, allergies, transplantation rejection, and cancer.
4) Celgene Corporation (CELG)
Celgene Corporation has a Current Ratio of 3.71 and Quick Ratio of 3.51 and Analysts' Rating of 1.90. The short interest was 1.70% as of 05/24/2012. Celgene Corporation, a biopharmaceutical company, discovers, develops, and commercializes various therapies to treat cancer and immune-inflammatory related diseases primarily in the United States and Europe.
The company's commercial stage products include REVLIMID, an oral immunomodulatory drug for the treatment of patients with multiple myeloma and myelodysplastic syndromes (MDS); VIDAZA, a pyrimidine nucleoside analog to treat various subtypes MDS and acute myeloid leukemia; and THALOMID for patients with multiple myeloma, and for the prevention and suppression of the cutaneous manifestation of erythema nodosum leprosum recurrence. It also offers ABRAXANE to treat metastatic breast cancer; and ISTODAX for the treatment of cutaneous and peripheral T-cell lymphoma.
5) Dyax Corp. (DYAX)
Dyax Corp. has a Current Ratio of 3.06 and Quick Ratio of 2.71 and Analysts' Rating of 2.30. The short interest was 4.45% as of 05/24/2012. Dyax Corp., a biopharmaceutical company, engages in the discovery, development, and commercialization of novel biotherapeutics for unmet medical needs in the United States.
The company utilizes its proprietary drug discovery technology, known as phage display, to identify antibody, small protein, and peptide compounds. It markets KALBITOR (ecallantide) for the treatment of acute attacks of hereditary angioedema (HAE) in patients 16 years of age and older.
6) Amgen Inc. (AMGN)
Amgen Inc. has a Current Ratio of 3.24 and Quick Ratio of 2.94 and Analysts' Rating of 2.50. The short interest was 1.84% as of 05/24/2012. Amgen Inc., a biotechnology medicines company, discovers, develops, manufactures, and markets human therapeutics based on advances in cellular and molecular biology for grievous illnesses primarily in the United States, Europe, and Canada.
The company markets recombinant protein therapeutics in supportive cancer care, nephrology, and inflammation. Its principal products include Aranesp and EPOGEN erythropoietic-stimulating agents that stimulate the production of red blood cells; Neulasta and NEUPOGEN to stimulate the production of neutrophils, which is a type of white blood cell that helps the body to fight infections; and Enbrel, an inhibitor of tumor necrosis factor that plays a role in the body's response to inflammatory diseases.
7) Cytori Therapeutics, Inc. (CYTX)
Cytori Therapeutics, Inc. has a Current Ratio of 3.68 and Quick Ratio of 3.37 and Analysts' Rating of 2.50. The short interest was 18.62% as of 05/24/2012. Cytori Therapeutics, Inc. engages in the development, manufacture, and sale of medical products and devices to enable the practice of regenerative medicine. Regenerative medicines focus on repairing or restoring lost or damaged tissue and cell function. Its principal products include the Celution family of products, which processes patients' adipose-derived stem and regenerative cells (ADRCs) at the point of care.
8) Alexion Pharmaceuticals, Inc. (ALXN)
Alexion Pharmaceuticals, Inc. has a Current Ratio of 2.30 and Quick Ratio of 2.03 and Analysts' Rating of 1.80. The short interest was 1.62% as of 05/24/2012. Alexion Pharmaceuticals, Inc., a biopharmaceutical company, engages in the innovation, development, and commercialization of life-transforming therapeutic products for treating patients with severe and ultra-rare disorders in the United States, Europe, Latin America, Japan, and the Asia Pacific.
The company focuses on developing products for the treatment of diseases in the areas of hematology, nephrology, neurology, metabolic disorders, oncology, and ophthalmology. It offers Soliris(eculizumab), a therapeutic product for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), a blood disorder; and atypical hemolytic uremic syndrome (aHUS), an ultra-rare and life-threatening genetic disease.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.