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Portola Sells Off On Hawkish Fed Comments, Fundamentals Unchanged

|Includes:Portola Pharmaceuticals (PTLA)

I recently wrote an article about a development-stage biotech/biopharma company, Portola Pharmaceuticals (NASDAQ:PTLA). This was written shortly after a large run-up in the stock. Following Janet Yellen's hawkish statements about companies such as Portola, or yet riskier stocks, PTLA has taken a big dive to below $25, from $29-30 when I wrote that article. I have been buying the "dip" (which feels more like a crash). I came across this professional article yesterday:

Apixaban Most Cost-Effective of New Oral Anticoagulants

July 10, 2014

As the disease burden of atrial fibrillation (NYSE:AF) increases along with the aging US population, cost-effectiveness of therapy is becoming an important consideration when deciding which anticoagulant therapy to prescribe. Although vitamin K antagonists (VKA), such as warfarin, have been traditionally the most inexpensive agents, their efficacy profile is less favorable than the novel oral anticoagulants (NOACs); other considerations, such as drug-drug interactions and tedious monitoring parameters also make VKAs less desirable than NOACs...

Table. Comparison of Annual Cost Based on Major Events: Novel Oral Anticoagulants vs Warfarin
  Strokes
per 100 PY
Major bleeding
per 100 PY
+/- medical costs per patient per year,
absent incident
stroke/major bleeding
Apixaban vs warfarin 1.1 fewer 2.1 fewer $1245 saved
Dabigatran vs warfarin 1.9 fewer 0.7 more $555 saved
Rivaroxaban vs warfarin 0.8 fewer 1.4 more $144 increased
PY = patient years.
Click to enlarge

Portola has in late-stage development an antidote that reverses Factor Xa inhibitors such as apixaban, a Xa inhibitor marketed in the U.S. as Eliquis by Bristol-Myers Squibb (NYSE:BMY) and Pfizer (NYSE:PFE).

My guess is that its Xa inhibitor andexanet alfa is worth a good deal more than the company is now valued at, which is $1 B (which includes net cash). It has not been submitted for FDA approval, so anything could happen, but I think this stock is now a very interesting potential value in a rich market.

Disclosure: The author is long PTLA.

Additional disclosure: Not investment advice. I am not an investment adviser.

Stocks: PTLA