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Robert Taylor
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I hold a Masters in Business Administration and have been a professional writer and stock analyst for the last 3 years. I am a contributor to several other sites including InvestmentUnderground.com and write primarily on tech stocks.
  • 4 Biotech Stocks For Growth 0 comments
    May 26, 2013 5:15 AM | about stocks: DNDN, GHDX, JNJ

    Biotech investments have been vastly popular in the last few years. It is one of the few market sectors where investors can still make large profits in a fairly short time. Last year, the five top biotech movers gained between 99% and 300% in one year.

    That being said, caution is king. Many emerging biotech firms struggle to find sufficient funding for their research, some are unable to prove the validity of their cancer treatments, and still others bomb in Phase II and III clinical trials. Just recently, a promising company named Keryx crashed and burned after its Phase III trials for its drug perifosine failed. Within days, the stock dropped more than 60% from its previous high.

    Investors can navigate this perilous ground and achieve big gains by looking at a few companies poised for growth in this key area. Here are two small caps and two large caps I see potential based on advencement in specific products.

    1) Dendreon Corporation (NASDAQ:DNDN) is a biotechnology corporation focused on the development of cancer therapeutics. The company's current flagship product is Provenge, used in the treatment of prostate cancer.

    This company has solid financials and began being noticed after its impressive last 2012 statement. Dendreon generated $325.3 million in product revenue, an increase of $122 million from the prior year, and a staggering 3x growth from 2010 of just under $48 million. Analysts are currently projecting revenue for 2014 to be $429.7 million. If that indeed happens, the company will have a strong likelihood of being cash flow positive. Currently the stock is $3.85, just under its 3 month high of $3.97.

    2)Viratech Corp. (OTC: VIRA) is the first social network platform focused on biotech research and experience-based searching. The goal of the company is to accelerate the research and development of new cancer therapies and diagnostics. In a relatively short period of time, this company has not only become a solid performer for investors, but a worldwide force against limitations in cancer research and a powerhouse behind therapy collaboration.

    The company works to consolidate this highly fragmented world of biotech research and development and make that knowledge public. Its sole aim is to benefit people. By leveraging the utility of social collaboration and networking, it meets a need that individuals cannot meet for themselves.

    From a financial standpoint, the stock has not seen much love. The stock is under a dime and under 25,000 volume. However, some analysts believe that with its new marketing and education campaign, trading could boost the stock at least over $.25. The key to future sustainability will be to earn revenue from its open source social networking products and partnerships.

    3)Genomic Health, Inc. (NASDAQ:GHDX) is a molecular diagnostics company focused on the global development and commercialization of genomic-based clinical laboratory services that analyze the underlying biology of cancer allowing physicians and patients to make individualized treatment decisions.

    Genomic Health has had an unbelievable 3 months, and a nod from analysts after its recent financial report filed this month. The balance sheet showed that the company had $17.1 million, down only $1 million from the 3 months before. However, even though the cash went down, the total current assets went up by about $2.5 million. Additionally, the company has no long-term debt on the balance sheet. On the income side, the company was able to generate $63.1 million in revenues, an increase of $4.6 million from the same period a year ago.

    4)This one may shock a few people, but I'd also throw Johnson & Johnson (NYSE:JNJ) in this group. The company has its own approved treatment for prostate cancer called Zytiga. Zytiga actually generated more than $960 million in sales in its first year on the market. With marketing and spending power of a titan such as J&J, even a moderately successful product can mean huge gains for the company.

    That being said, this company does not offer one product, but a wide range of pharmaceutical and medical devices as well as its mainstay of packaged household goods and cleaners. It also has the leverage over the aforementioned companies as it has an established pipeline for distribution, using big-box retailers to sell its products.

    Additionally, the company stated that by 2017 it plans to seek regulatory approval for a dozen new medicines and two dozen variations of existing ones. This kind of expansion, particularly in this sector, will no doubt boost the value of its currently $87 stock.

    Investors need to look at both sector and business structure. In the market, both biotech and social networking are fields have seen impressive stock growth, thus, Viratech is a good choice. In addition, the business model for Dendreon has already shown it is capable and poised for sustainable growth. Finally, as biotech companies continue to set new record stock prices on a daily basis, this is a perfect time to invest in a multi-billion industry.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Themes: quick-picks-lists Stocks: DNDN, GHDX, JNJ
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