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Looking into how a company finances growth can tell you a lot about the management and outlook. When a company keeps the debt reined in, using it only frugally and responsibly, it shows that there are other sound sources of funding such as profits and reserves that have been accessed to fuel growth initiatives. With this in mind, we looked for stocks in the pharmaceutical category where debt has been kept to a minimum. The companies that made our cut have also been recently reviewed by analysts and given "Buy" or "Strong Buy" ratings. See the list below to learn more about these pharmaceutical stocks.

The Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio; this value computes the proportion of a company's long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.

The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.

We first looked for pharmaceutical stocks. From here, we then looked for companies that analysts rate as "Buy" or "Strong Buy" (mean recommendation < 3). Next, we then screened for businesses that have maintained a sound long term capital structure (Long Term D/E Ratio<.1). We next screened for businesses that have maintained a sound capital structure (D/E Ratio<.1). We did not screen out any market caps.

Do you think these stocks will go up in price? Please use our list to assist with your own analysis.

1) Endocyte, Inc. (NASDAQ:ECYT)

SectorHealthcare
IndustryDrug Manufacturers - Major
Market Cap$328.21M
Beta-

ECYT stock chart

Key Metrics

Analysts' Rating2.00
Long Term Debt/Equity Ratio0.00
Debt/Equity Ratio0.00
Short Interest9.04%

Endocyte, Inc., a biopharmaceutical company, develops targeted therapies for the treatment of cancer and inflammatory diseases. The company uses its proprietary technology to create novel small molecule drug conjugates (SMDCs) and companion imaging diagnostics. Its SMDCs target receptors that are over-expressed on diseased cells, relative to healthy cells. The company's principal SMDC product candidate, EC145, has been evaluated in a randomized Phase II clinical trial for the treatment of women with platinum-resistant ovarian cancer, and it also completed a Phase II single-arm clinical trial for pre-treated non-small cell lung cancer. Its preclinical development products include EC0489 and EC0225, which are in Phase I clinical trial for the treatment of solid cancer tumors; EC17 that has completed Phase I clinical trial for the treatment of solid cancer tumors; EC0531, a tubulysin conjugate to treat solid tumors; and EC0746 and EC0565 foliate receptors for the reduction of inflammation. The company's products under development also comprise EC20, a proprietary companion imaging diagnostic product for the identification of folate receptor in cancer patients; EC1069 for prostate cancer therapy; and EC0652 that is in early clinical trials for use as a companion imaging diagnostic for SMDCs. Endocyte, Inc. was founded in 1995 and is headquartered in West Lafayette, Indiana.

2) Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL)

SectorHealthcare
IndustryDrug Manufacturers - Major
Market Cap$705.56M
Beta1.47

RIGL stock chart

Key Metrics

Analysts' Rating1.70
Long Term Debt/Equity Ratio0.00
Debt/Equity Ratio0.00
Short Interest5.54%

Rigel Pharmaceuticals, Inc., a clinical-stage drug development company, engages in the discovery and development of novel, small-molecule drugs for the treatment of inflammatory and autoimmune diseases, as well as muscle disorders. Its product development programs include fostamatinib, an oral spleen tyrosine kinase (SYK) inhibitor that is in Phase III clinical trials for rheumatoid arthritis; R343, an inhaled SYK inhibitor, which completed Phase I clinical trials for asthma; R333, a topical JAK/SYK inhibitor, which is in Phase I clinical trials for the treatment of discoid lupus; and R548, an oral janus kinase 3 (JAK3) inhibitor that in Phase I clinical trials for the treatment of transplant rejection and other immune disorders. The company's research/preclinical programs comprise R348, a soluble JAK/SYK inhibitor for topical ophthalmic use; R256, an inhaled interleukin 13 signaling inhibitor for chronic asthma; an oral activator of adenosine monophosphate activated protein kinase for enhancing the body's energy utilization and restore muscle endurance in chronically ill subjects; and growth/differentiation factor 8 inhibitor to prevent muscle loss. Rigel Pharmaceuticals, Inc. has collaboration agreements with AstraZeneca AB to develop and commercialize oral SYK inhibitors; and Daiichi Sankyo Co., Ltd. to conduct research related to drug targets called ligases that control cancer cell proliferation through protein degradation, as well as a license agreement with BerGenBio AS for the development and commercialization of an oncology program. The company was founded in 1996 and is based in South San Francisco, California.

3) Impax Laboratories Inc. (NASDAQ:IPXL)

SectorHealthcare
IndustryDrug Manufacturers - Major
Market Cap$1.61B
Beta0.32

IPXL stock chart

Key Metrics

Analysts' Rating2.50
Long Term Debt/Equity Ratio0.00
Debt/Equity Ratio0.00
Short Interest4.83%

Impax Laboratories, Inc., a specialty pharmaceutical company, engages in the development, manufacture, and marketing of bioequivalent pharmaceutical products. The company operates in two divisions, Global Pharmaceuticals and Impax Pharmaceuticals. The Global Pharmaceuticals division develops, manufactures, sells, and distributes generic pharmaceutical products. It provides its generic pharmaceutical prescription products directly to wholesalers and retail drug chains; and generic pharmaceutical over-the-counter and prescription products through unrelated third-party pharmaceutical entities. The Impax Pharmaceutical division develops proprietary brand pharmaceutical products that address central nervous system disorders, including Alzheimer's disease, attention deficit hyperactivity disorder, depression, epilepsy, migraines, multiple sclerosis, Parkinson's disease, and schizophrenia, as well as promotes third-party branded pharmaceutical products. As of May 2, 2011, the company marketed 101 generic pharmaceuticals, which represent dosage variations of 29 different pharmaceutical compounds; and another 16 of its generic pharmaceuticals representing dosage variations of 4 different pharmaceutical compounds. It markets and sells its generic pharmaceutical prescription drug products in the continental United States and the Commonwealth of Puerto Rico. The company has a strategic alliance agreement with Teva Pharmaceuticals (NYSE:TEVA) Curacao N.V. Impax Laboratories, Inc. was founded in 1993 and is headquartered in Hayward, California.

4) Astex Pharmaceuticals, Inc. (NASDAQ:ASTX)

SectorHealthcare
IndustryDrug Manufacturers - Major
Market Cap$258.41M
Beta1.09

ASTX stock chart

Key Metrics

Analysts' Rating2.00
Long Term Debt/Equity Ratio0.00
Debt/Equity Ratio0.00
Short Interest4.92%

Astex Pharmaceuticals, Inc. engages in the discovery and development of small molecule therapeutics with a focus on oncology and hematology. It develops small molecule therapeutics using its fragment-based drug discovery platform, Pyramid. The company offers Dacogen (decitabine) for injection, a DNA hypomethylating agent for the treatment of myelodysplastic syndromes (MDS). Its product pipeline includes Dacogen-Hypomethylator, a Phase III clinical trial product for the treatment of myelodysplastic syndromes and acute myeloid leukemia (AML); AT13387, a small molecule inhibitor of Hsp90, which is completing a Phase I study in patients with advanced refractory tumors and in Phase II study for the treatment of refractory GIST patients; SGI-110, a small molecule, DNA-hypomethyating agent in Phase I clinical trial for MDS and AML; and Amuvatinib/MP-470 (SCLC), a tyrosine kinase inhibitor, which is in Phase II clinical trial for various cancer targets, including mutant c-Kit. The company's products under development also comprise AT7519 that is in a Phase II study in combination with bortezomib for multiple myeloma; AT13148, an orally active small molecule inhibitor of PKB/Akt and p70S6 kinase to commence Phase I clinical trial for the treatment of solid tumors; and AT9283, which is in two Phase I, open-label, dose-escalation trials for advanced solid tumors and in a Phase I/II open-label, dose-escalation trial for patients with acute leukemia. In addition, it develops LEE011, a Phase I human clinical trial CDK4 inhibitor; AZD5363, an orally active, selective protein kinase B inhibitor in Phase I clinical trial; and FGFr inhibitor for the treatment of cancer, as well as AZD3839, a Phase I study beta-secretase inhibitor for treating Alzheimer's disease. The company was formerly known as SuperGen, Inc. and changed its name to Astex Pharmaceuticals, Inc. in September 2011. The company was founded in 1991 and is headquartered in Dublin, California.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 08/28/2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. This article was prepared for ZetaKap Media by one of our full-time analysts. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

Source: 4 Low-Debt Pharmaceutical Stocks Backed By Analysts