2 Biopharmaceutical Stocks with Strong Net Cash
Jorge is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
All investors know that the greatest risk in biopharmaceutical stocks is the future need of funding of these companies. Many biopharmaceutical companies use methods of financing that can cause dilution and loss of bookvalue. For this reason, a good strategy of investing in biopharmaceutical stocks is to look for companies that will not need to perform short term dilutions. The most important risk of these biopharmaceutical companies is a possible dilution due to the necessity to start new studies in their pipeline portfolios. In this article, I will write about two biopharmaceutical companies that have enough net cash so as not to have to perform searches for short-term financing.
BioSante Pharmaceuticals (NASDAQ: BPAX) is a specialty pharmaceutical company focused on the development of various products for female sexual health and oncology. BioSante was founded in 1996 and is headquartered in Lincolnshire, Illinois.
Pipeline and Product Portfolio
- Elestrin™ is an ultra low-dose, transdermal estradiol gel indicated for the treatment of moderate-to-severe hot flashes associated with menopause. Elestrin™ is available by prescription only. Jazz Pharmaceuticals is marketing Elestrin in the U.S. using its women's health sales force that targets estrogen-prescribing physicians in the U.S., a group comprised mostly of gynecologists.
- Testosterone gel for men is licensed to Teva Pharmaceuticals, USA. Testosterone gel for men NDA was approved by the FDA on February 14, 2012. Teva is responsible for all regulatory and marketing activities.
- BioSante's GVAX Cancer Vaccines use cell lines that are genetically modified to secrete granulocyte-macrophage colony-stimulating factor (GM-CSF), an immunostimulant.
GVAX Cancer Vaccines
- Currently, GVAX Cancer Vaccines are in various Phase I and Phase II cancer clinical trials and may represent the widest portfolio (cancer types) of cancer vaccines in development. Studies are conducted primarily at Johns Hopkins Cancer Center and are sponsored/funded by The Johns Hopkins Sidney Kimmel Comprehensive Cancer Center, various philanthropies and foundations.
Financials
The company reported the third-quarter financial results on Nov. 7 with the following highlights:
| Cash | $38.58 Million |
| Debt | $10.92 Million |
| Shares Outstanding | 24.42 Million |
| Net Cash per share | $1.13 |
In Biosante Pharmaceuticals' last quarter, we can see that its quarter operating expenses reached $5.44 million. Based on the operating expenses and the company's cash deducting the current debt from them, we can think that the company would have enough cash for the next six financial quarters. The company has a market cap of $26.38 million and an enterprise value of -$5.56 million. Its trailing P/E is incalculable, as is its forward P/E. Biosante's estimated growth rate for this year is 25.16%.
The most important competitor is Columbia Laboratories (NASDAQ: CBRX). This company offers bioadhesive vaginal gel products that provide solutions for infertility, pregnancy support, amenorrhea, and other gynecologic conditions. Columbia laboratories competed directly with Testosterone gel for men of Biosante pharmaceuticals. Columbia laboratories has STRIANT® (testosterone buccal system). This product was approved by the FDA in June 2003 for a deficiency or absence of endogenous testosterone associated with hypogonadism in men. On the one hand, Columbia laboratories announced a revenue on three months ended September 30 of $18.73MM. On the other hand, Biosante Pharmaceuticals announced a revenue on three months ended September 30 of $110.383k.
From a technical standpoint, this stock is currently trading below both its 50-day and 200-day moving averages. This stock plunged from its December, 2011 high of $15.96 to a recent low in November of $1.12. If you are bullish on this stock, I would look to be a buyer on the next high-volume move above some near-term overhead resistance at $1.27 a share. Look for volume that's tracking in close to or above its three-month average action of 394,250 shares.
OncoGenex Pharmaceuticals (NASDAQ: OGXI) is a biopharmaceutical company that engages in the development and commercialization of new cancer therapies that address treatment resistance in cancer patients. OncoGenex is headquartered in Bothell, Washington.
Pipeline Portfolio
Source: Oncogenex Pharma
Financials
The company reported the third-quarter financial results on November 8 with the following highlights:
| Cash | $95.81 Million |
| Debt | $27.41 Million |
| Shares Outstanding | 14.65 Million |
| Net Cash per share | $4,66 |
In OncoGenex Pharmaceuticals' last quarter financial, we can see that its quarterly operating expenses reached $8.29 million. Based on the operating expenses and the company's cash deducting the current debt from them, we can think that the company would have enough cash for the next seven financial quarters. The company has a market cap of $176.74 million and an enterprise value of $91.37 million. Its trailing P/E is incalculable, as is its forward P/E. Oncogenex's estimated growth rate for this year is 15.74%.
The most important competitor is Celgene Corporation (NASDAQ: CELG). This company, discovers, develops, and commercializes various therapies to treat cancer and immune-inflammatory related diseases primarily in the United States and Europe. Celgene Corporation competed directly with OGX-427 of Oncogenex Pharmaceuticals. Celgene Corporation has Abraxane®. This compound is in phase II studies for the treatment of bladder cancer. On the one hand, Celgene Corporation announced a revenue on three months ended September 30 of $1.41 billion. On the other hand, Oncogenex Pharmaceuticals announced a revenue on three months ended September 30 of $6.57MM.
From a technical standpoint, this stock is currently trading below both its 50-day and 200-day moving averages. This stock plunged from its March high of $17.48 to a recent low in November of $11.95. If you are bullish on this stock, I would look to be a buyer on the next high-volume move above some near-term overhead resistance at $12.65 a share. Look for volume that's tracking in close to or above its three-month average action of 36,055 shares.
*Chart data sourced from finviz.com, all other data sourced from yahoo.com as well as the webs of the previously mentioned.
TraderUsa has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!
