3 Biotech Stocks Holding Down The Debt And On Track For Growth

Includes: ANIK, CBPO, PACB
by: ZetaKap

For a biotechnology company to become successful, it requires a significant amount of coordination between research, development, creativity, expertise and persistence. It can be a long road to get products to market. So it is understandable that many biotech companies utilize debt to finance those before-market years. However, it also sets these companies up on a slower track for growth. For our scan today, we sought out biotech companies that have managed to build a solid portfolio of interventions and treatments without taking on excessive debt. The idea is that by remaining relatively debt free, these companies can focus on growth. Further, these companies have significant projected EPS growth rates for the next five years. The summaries and graphs below are a helpful place for you to start your own assessment of these biotech stocks.

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 5-Year Expected EPS Growth Rate is a long term annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.

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.

We first looked for biotechnology stocks. We then looked for businesses that have expected earnings per share growth of more than 25 percent for the next five years (5-year Projected EPS Growth Rate>25%). We next screened for businesses that have maintained a sound long term capital structure (Long Term D/E Ratio<.1). We did not screen out any market caps.

Do you think these stocks hold solid value? Use this list as a starting point for your own analysis.

1) Anika Therapeutics Inc. (NASDAQ:ANIK)

Sector Healthcare
Industry Biotechnology
Market Cap $200.10M
Beta 1.49

ANIK stock chart

Key Metrics

5-Year Projected Earnings Per Share Growth Rate 30.00%
Long Term Debt/Equity Ratio 0.09
Short Interest 3.74%

Anika Therapeutics, Inc., together with its subsidiaries, develops, manufactures, and commercializes therapeutic products for tissue protection, healing, and repair. Its products are based on hyaluronic acid, a naturally occurring biocompatible polymer found in the body. The company's products include ORTHOVISC, ORTHOVISC mini, and MONOVISC for the treatment of osteoarthritis of the knee and various other joints; Hyalograft C Autograft for cartilage regeneration; Hyalofast, a biodegradable support for human bone marrow mesenchymal stem cells; Hyalonect, a woven gauze used as a graft wrap; Hyaloss, HYAFF fibers used to mix blood/bone grafts to form a paste for bone regeneration; and Hyaloglide, an ACP gel used in tenolysis treatment.

It also provides wound care products that comprise Hyalograft 3D and Laserskin for the regeneration of skin; and Hyalomatrix for the treatment of burns and ulcers, as well as ELEVESS for facial wrinkles and scar remediation. In addition, the company offers AMVISC, AMVISC Plus, STAARVISC-II, Optivisc, AnikaVisc, and AnikaVisc Plus, which are injectable HA products used as viscoelastic agents in ophthalmic surgical procedures, such as cataract extraction and intraocular lens implantation. Further, it provides INCERT, a HA product for the prevention of post-surgical adhesions; Hyalobarrier, a post operative adhesion barrier for use in the abdomino-pelvic area; and Merogel, a woven fleece nasal packing, as well as Merogel Injectable, a hydrogel for the treatment of ear, nose, and throat disorders.

Additionally, the company offers HYVISC, an injectable HA product used for the treatment of joint dysfunction in horses due to non-infectious synovitis associated with equine osteoarthritis. Anika Therapeutics, Inc. markets its products directly, as well as through a network of distributors worldwide. Anika Therapeutics, Inc. was founded in 1983 and is headquartered in Bedford, Massachusetts.

2) Pacific Biosciences of California, Inc. (NASDAQ:PACB)

Sector Healthcare
Industry Biotechnology
Market Cap $113.19M
Beta -

PACB stock chart

Key Metrics

5-Year Projected Earnings Per Share Growth Rate 30.00%
Long Term Debt/Equity Ratio 0.02
Short Interest 5.67%

Pacific Biosciences of California, Inc., a development stage company, develops, manufactures, and markets an integrated platform for genetic analysis. The company engages in developing a technology platform that enables single molecule, real-time for the detection of biological processes. It primarily focuses on the deoxyribonucleic acid sequencing market. The company's product includes the PacBio RS, a sequencing platform, which consists of an instrument platform that uses its proprietary consumables, such as SMRT Cells and reagent kits. The company's customers include genome centers, genomics service providers, and agricultural companies, as well as clinical, government, and academic institutions. Pacific Biosciences of California, Inc. was founded in 2000 and is headquartered in Menlo Park, California.

3) China Biologic Products, Inc. (NASDAQ:CBPO)

Sector Healthcare
Industry Biotechnology
Market Cap $253.99M
Beta 1.35

CBPO stock chart

Key Metrics

5-Year Projected Earnings Per Share Growth Rate 30.00%
Long Term Debt/Equity Ratio 0.00
Short Interest 0.51%

China Biologic Products, Inc., a biopharmaceutical company, through its subsidiaries, engages in the research, development, manufacture, and sale of human plasma-based biopharmaceutical products to hospitals and inoculation centers in the People's Republic of China. It offers Human Albumin for the treatment of shock caused by blood loss trauma or burn; raised intracranial pressure caused by hydrocephalus or trauma; oedema or ascites caused by hepatocirrhosis and nephropathy; and neonatal hyperbilirubinemia, as well as for the prevention and treatment of low-density-lipoproteinemia. The company also offers Human Hepatitis B Immunoglobulin for the prevention of measles and contagious hepatitis; Human Immunoglobulin and Human Immunoglobulin for Intravenous Injection products for original immunoglobulin deficiency, secondary immunoglobulin deficiency, and auto-immune deficiency diseases; and Thymopolypeptides Injection that is used in the treatment of various original and secondary T-cell deficiency syndromes, auto-immune deficiency diseases, and a range of cell immunity deficiency diseases, as well as assists in the treatment for tumors.

In addition, it provides Human Rabies Immunoglobulin primarily for passive immunity from bites or claws by rabies or other infected animals; Human Tetanus Immunoglobulin for the prevention and therapy of tetanus; and Placenta Polypeptide that is used for the treatment of cell immunity deficiency diseases, viral infection, and leucopenia caused by various reasons, as well as assists in postoperative heating. The company's products under development include Human Prothrombin Complex Concentrate; Human Coagulation Factor VIII; Human Hepatitis B Immunoglobulin (PH4) for Intravenous Injection; Human Fibrinogen; Varicella Hyperimmune Globulins; and Human Immunoglobulin for Intravenous Injection. The company is based in Beijing, the People's Republic of China.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 09/17/2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: 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.

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