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Antares Pharma: Building Momentum To 2018 Profitability

Arthur Frentzel profile picture
Arthur Frentzel


  • Following the FDA approval of Makena subcutaneous February 14, the company is set to attain profitability in 2018.
  • After receiving a CRL for its testosterone replacement drug, Xyosted, the stock plunged from a high of $4.09 to a low of $1.58 in November, now trending up.
  • AB-rated generic EpiPen to be supplied by Teva has undergone FDA scrutiny for years, resulting in a drag on ATRS shares for an extended period of time.
  • Article will recap and analyze potential outcomes during the 2018 time frame and beyond.

Antares Pharma (ATRS) investors have experienced a wild ride as the stock has been subject to both long and short speculation on the company's ability to execute its plan for FDA approvals. However, evidence is building to support a thesis that the stock may be transitioning from a pure speculative play to growth and value, which could temper downside pressure on ATRS shares. As three drug approvals in full-year 2018 have a reasonable chance of attainment in 2018 (with one of the three already booked), the company continues to report improved revenue and earnings with a 5-year sales growth rate of 26%. In the latest reported Q3, the company reported 12% overall revenue growth, with 18% growth in the proprietary Otrexup drug and 88% growth in the partnered (with Teva) Sumatriptan. While quarter-to-quarter revenue continues to be lumpy (due mainly to size), the trend is decidedly up.

Makena SC

With Antares stock currently trading near $2.20, it is apparent investors have shrugged off the February 14 approval of Makena SC as offering meaningful benefit to profitability. Accordingly, it can be argued that investor pessimism of Makena SC is justified since, according to Amag Pharmaceuticals (AMAG) management guidance, Makena will be subject to generic competition by the mid-2018.

While Amag reported 2017 full-year Makena revenue $387 million, a 2017 Analyst Day Presentation illustrated three guidance scenarios in an attempt to project Makena revenue by 2020 with high, middle, and low projections. The middle projection estimated 2020 Makena revenue at $200 million due to likely full ramp of generic competition. While some analysts are projecting Makena revenue will fall further due to generics, several key points favor Makena SC maintaining significant market share. First, Amag is pricing Makena SC identically to Makena IM (intramuscular), absorbing the cost of the Antares supplied auto-injector. Secondly, while it is apparent that patients may have access to

This article was written by

Arthur Frentzel profile picture
I have been investing in common stocks for over 50 years.  With all the opportunities and information that is available today, it is more exciting than ever.  However, due to extreme current valuations of many stocks, it is increasingly a stock pickers game to find names that have not yet been recognized in the market.  The foregoing entails a great deal of work and greater risk, but also the potential for outsized returns.  The goal of my writing is to find and research relatively unknown companies that have big potential upside and attractive risk/reward profiles.   Readers should understand that companies I write about are mostly speculative opportunities that should not represent core holdings in a diversified portfolio.  Your comments and input on my articles are greatly appreciated which enhance learning for everyone.

Analyst’s Disclosure: I am/we are long ATRS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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