Outlook 2011, Part II: 2010 BioHealth Winners (AMRN, ILMN, INHX, JAZZ, NBIX, NPSP, THRX, VPHM)
2011 is getting closer and closer, and we wanted to review some of the standout BioHealth winners for 2010 to see what their prospects are for 2011. The rounds of exponential gains seen in 2009 were not repeated as frequently in 2010 for the severity of gains. The FDA has been difficult to predict in 2010 and many companies with high expectations managed to become flops which either saw denied FDA approval or were given severe delays. We wanted to review the companies that are up more than 100% from their lows of the last 52-weeks to see which have prospects out into 2011 or beyond.
Amarin Corporation plc (NASDAQ: AMRN), Illumina Inc. (NASDAQ: ILMN), Inhibitex Inc. (NASDAQ: INHX), Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ), Neurocrine Biosciences Inc. (NASDAQ: NBIX), NPS Pharmaceuticals, Inc. (NASDAQ: NPSP), Theravance Inc. (NASDAQ: THRX), and ViroPharma Inc. (NASDAQ: VPHM).
Amarin Corporation plc (NASDAQ: AMRN) rose to $5.85 and its new 52-week trading range is $0.93 to $6.00. Its market cap is now $578 million. This one owes Monday to its exponential gain status. the stock was up big on Monday and was only at $3.55 before news that its AMR101 met pivotal phase 3 study endpoints with lower triglycerides and no statistically significant increase in LDL-C and safety profiles. Real revenues are expected to still be beyond 2011.
Illumina Inc. (NASDAQ: ILMN) is more on the instrument side of the biohealth sector in integrated systems for the analysis of genetic variation and biological function. At $60.26, it is one of the only multi-billion market cap stocks on the 2010 list. The 52-week range is $26.87 to $61.77, it has a $7.5 billion market cap, and trades about 1.2 million shares per day. Thomson Reuters expects $887.73 million in 2010 revenues and sees $1.08 billion in 2011 revenues.
Inhibitex Inc. (NASDAQ: INHX) trades at $2.90 versus a 52-week range of $0.67 to $2.95; its market cap is $180 million and it trades only about 200,000 shares per day. The company’s opportunity comes in Hapatitis C, although it is development stage and no real revenues are expected through nextr year. About a month ago it was awarded $489,000 in grants under the Therapeutic Discovery Tax Credit Program.
Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ) trades at $16.72 and its 52-week trading range is $6.38 to $17.06. Shares are up right at 100% for 2010. The market cap is $650 million and it trades close to 730,000 shares per day. Jazz describes its self as a company which identifies, develops and commercializes innovative treatments for important, underserved markets in neurology and psychiatry. Its two products are Xyrem for narcolepsy and Luvox as an anti-depressant. The company is already generating revenues, with $128.4 million in 2009 and Thomson Reuters looking for $168.45 million for 2010 and $237.95 million in 2011.
Neurocrine Biosciences Inc. (NASDAQ: NBIX) trades at $7.05 against a 52-week range of $1.94 to $8.69, and shares have nearly tripled so far in 2010. The market cap here is $387 million and average trading volume is about 550,000 shares per day. Neurocrine develops drugs for the treatment of neurological and endocrine-related diseases and disorders. Its pipeline partnerships are with Abbott Labs (NYSE: ABT) in men’s and women’s health, GlaxoSmithKline (NYSE: GSK) in anxiety and depression, and Boehringer for Type II diabetes. The company is just in the first year of real revenue stages and Thomson Reuters expects $32.9 million in 2010 revenues and $68.8 million in 2011 revenues. June was its first quarter of revenues at $4.64 million, followed by $14.448 million in the September quarterly revenues.
NPS Pharmaceuticals, Inc. (NASDAQ: NPSP) trades at $6.15 versus a 52-week range of $2.99 to $7.75; its market cap is $411 million and it trades more than 400,000 shares per day. The company is developing Gattex to treat short bowel syndrome that prevents patients from absorbing nutrients from food. NPS is also developing NPSP558 for hypoparathyroidism in adults. Revenue rose to $21.1 million on increased royalty fees, although R&D costs are up as well. Both are in later-stage studies and Thomson Reuters has revenue estimates of $88.7 million in 2010 and $103.46 million in 2011.
Theravance Inc. (NASDAQ: THRX) trades at $25.00 and its 52-week range is $9.62 to $25.44; the market cap here now $1.85 billion and it trades more than 500,000 shares per day. Shares were under $14 at the start of 2010 but fell to under $10 in February. The company recently raised $129 million from GlaxoSmithKline PLC (NYSE: GSK), a vote that its joint-development of Relovair as a new lung disease and asthma drug is going well. The companies noted back in September that Relovair met its goals in mid-stage studies, and many view this is a potential replacement drug for Advair. The company is still pre-revenues with $22 to $24 million in revenues in each of the last three years; Thomson Reuters sees only $23.6 million in 2010 revenues and $29.3 million in 2011 revenues.
ViroPharma Inc. (NASDAQ: VPHM) trades around $15.70 versus a 52-week range of $7.40 to $15.79. Its big gains came in 2005 and the stock is still well under its 1999 and 2000 peak above $60.00. Its market cap is $1.22 billion and it trades about 900,000 shares per day. Products include Cinryze for routine prophylaxis against angioedema attacks and Vancocin for treatment of antibiotic-associated pseudomembranous colitis caused by Clostridium difficile and enterocolitis caused by Staphylococcus aureus and MRSA strains. 2009 revenues were $310.449 million and Thomson Reuters has estimates of $ 422.1 million in 2010 and $332.4 million in 2011.
Yesterday’s first edition of the stand-out BioHealth names for 2010 included Ariad Pharmaceuticals Inc. (NASDAQ: ARIA), Chelsea Therapeutics International Ltd. (NASDAQ: CHTP), Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC), EntreMed Inc. (NASDAQ: ENMD), Exact Sciences Corporation (NASDAQ: EXAS), Exelixis, Inc. (NASDAQ: EXEL), Amicus Therapeutics, Inc. (NASDAQ: FOLD), and Idenix Pharmaceuticals Inc. (NASDAQ: IDIX). FULL DETAILS
JON C. OGG
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