Top Biotechs With Upside Ahead of Earnings (GILD, AMLN, ARIA, INCY, JAZZ, DNDN, HGSI, ILMN, AMGN, CELG, BIIB, BMRN, LIFE, REGN, AMLN, CBST, ONXX, THRX, VPHM)

October 19, 2011 · Filed Under analyst calls, Cancer, dendreon, Financial, M&A, R&D · 6 Comments 

Earnings season is afoot and we wanted to see how the analysts are ranking the top biotech stocks before these companies begin their earnings reports.  We pulled the top biotech and biohealth related stocks which have market caps of $1 billion and higher and we broke these out into three separate groups by size.  The large-cap biotechs are ranked in descending order by size.  The stocks under $10 billion in market cap and then under $3 billion were broken out in alphabetical order. 

We have compiled some color on selected names, but we also listed the current trading prices, the implied price targets from Thomson Reuters, gave multiples of earnings estimates (from Thomson Reuters) for the forward year (2012 in most cases), showed the trading history and listed a price-to-book ratio.  We did not take any merger news into consideration so that we could just show an as-is model here.

Of the large cap stocks in biotech, Gilead Sciences, Inc. (NASDAQ: GILD)  was the leader.  Several other standouts in the biotechs under $10 billion with a high degree of expected upside were as follows: Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN), ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA), Incyte Corporation (NASDAQ: INCY), and Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ).  Other biotechs such as Dendreon Corporation (NASDAQ: DNDN), Human Genome Sciences, Inc. (NASDAQ: HGSI) , and Illumina, Inc. (NASDAQ: ILMN) also screen out as those with the most upside, but that is because of huge share price drops of late.

THE $10 BILLION AND OVER IN MARKET CAP

Amgen Inc. (NASDAQ: AMGN) is the largest of the independent biotechs and it remains stuck like Chuck.  At $56.71, the consensus target is $64.85 and the stock trades at a mere 10-times 2012 earnings estimates.  Its 52-week range is $47.66 to $61.53 and its market cap is north of $52 billion.  It is also worth about 2-times book value.  Implied Upside: 14.3%.

Gilead Sciences, Inc. (NASDAQ: GILD) trades around $40.37 and estimates have a consensus price target of $47.96.  This forward earnings multiple is only about 9.0 now.  The 52-week range is $35.28 to $43.49, the market cap is $31.1 billion and the company trades at more than 5-times book value.  Implied Upside: 18.5%.

Celgene Corporation (NASDAQ: CELG) trades at $64.97 and the consensus price target is about $71.86.  This one is more expensive than many of the established biotech players at more than 15-times forward earnings.  Celgene’s 52-week range is $48.92 to $67.01, its market cap is $29.8 billion, and it trades at nearly 5-times book value.  Implied Upside: 9.8%.

Biogen Idec Inc. (NASDAQ: BIIB) remains the big-cap recovery stock of biotech.  At $102.00, its consensus price target is $110.36, and it trades at close to 16-times forward earnings.  The market cap is about $24.7 billion, the 52-week range is $57.58 to $109.63, and the company is worth about 4-times book value. Implied Upside: 8.5%.

UNDER $10 BILLION IN MARKET CAP

BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) trades at $33.05 and analysts have a consensus price target of $36.25. Unfortunately, this one is expected to lose money this year at -$0.31 EPS and next year’s earnings are expected to be -$0.04.  The 52-week range is $21.70 to $34.50, its market cap is $3.7 billion, and it is listed as trading at close to 5.0-times book value. Implied Upside: 9.6%.

Illumina, Inc. (NASDAQ: ILMN) trades around $26.56 and the consensus price target is about $42.90.  The company trades at more than 18-times next year’s earnings estimates, its 52-week range is $25.57 to $79.40, its market cap is about $3.3 billion, and it trades at almost 2.9-times its book value.  Implied Upside: 62%.

Life Technologies Corporation (NASDAQ: LIFE) may be difficult to compare after a huge run higher followed by a recent tank in the share price. It is also on the equipment side. Shares are back down around $37.24 and the consensus analyst price target is now down to $52.66.  The company now trades at barely 9-times forward earnings, if you trust the “E” in that P/E ratio.  LIfe’s 52-week trading range is $35.30 to $57.25, its market cap is about $6.7 billion, and the stock is worth about 1.5-times the stated book value. Implied Upside: 41%.

Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) trades around $60.00 after a large drop due to a $400 million convertible note offering.  The consensus price target is about $66.14.  The company is also expected to lose as much as $2.00 per share in 2012.  It has a 52-week trading range of $24.29 to $79.90, its market cap is $5.5 billion, and it trades at more than 12-times its previously stated book value.  Implied Upside: 10.1%.

UNDER $3 BILLION IN MARKET CAP

Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) trades around $10.14 and the consensus price target from analysts is $13.44.  The 52-week trading range is $8.03 to $21.23, its market cap is about $1.5 billion, and it is worth about 4.6-times book value. Implied Upside: 32.5%.

ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) trades around $10.25 and the consensus price target is $15.44.  The company is expected to have losses this year and next.  Its 52-week trading range is $3.51 to $13.50, its market cap is $1.35 billion, and the book value at the last report was barely positive.  Implied Upside: 50%.

Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) was another big winner earlier in the year and its shares are now at $36.71 versus a consensus price target of $40.82.  This used to be a value stock but now trades at closer to 22-times next year’s earnings estimates.  The 52-week range is $20.81 to $39.29, the market cap is $2.24 billion, and it trades at just over 3-times book value.  We once considered this a biotech buyout target, but that is in the past. Implied Upside: 11%.

Dendreon Corporation (NASDAQ: DNDN) shares are now around $9.40 and the consensus analyst target has come down all the way to $13.72.  The company has no forward P/E ratio now as it is expected to lose money.  The 52-week range is $7.81 to $43.96, its market cap is down to $1.4 billion, and it is listed as being worth more than 3-times its own stated book value.  Implied Upside: 45%.  Shares have fallen far from grace, so analyst targets and the ratios may all look a bit off.  We also cannot count on estimates since the analysts and the company got this one so wrong on the end demand for Provenge.  Now we have to hope that Provenge can have many more expanded uses outside of prostate cancer or this is a hard one to follow.  What is odd is that Provenge is being tested for other uses and those could reignite interest if more promising data ever comes out.  If not, let’s just say this was a painful lesson in biotech.

Human Genome Sciences, Inc. (NASDAQ: HGSI) is now up around $12.81 after buyout rumors and the consensus target is still listed as being roughly $24.00.  The company trades at about 24-times next year’s earnings estimates, its 52-week range is $10.40 to $30.15, its market cap is now under $2.5 billion, and it is worth about 5.3-times its book value. Implied Upside: 87%.

Incyte Corporation (NASDAQ: INCY) trades around $14.04 and anlaysts have a consensus price target of $22.92 on the stock.  It is expected to lose money this year and next year and the 52-week range is $12.58 to $21.15. While there is a $1.77 billion market cap, Incyte’s is listed as having a negative book value as laibilities exceed assets.  Implied Upside: 63%.

Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ) trades around $40.00 after a sharp drop due to an FDA warning.  That may make the figures a bit distorted.  The consensus price target is $54.00 but that does not include the FDA impact.  Jazz trades at only about 10.6-times next year’s earnings estimates. Its 52-week range is $10.51 to $47.88, its market cap is almost $1.7 billion, and the company trades at close to 16-times an implied book value. Implied Upside: 35%.

ONYX Pharmaceuticals, Inc. (NASDAQ: ONXX) trades at close to $34.50 and the consensus target is closer to $44.60.  It is one which is also expected to lose money this year and next year.  The 52-week trading range is $26.17 to $45.90, its market cap is $2.2 billion, and the stock trades at close to 3.5-times its book value. Implied Upside: 29.2%.

Seattle Genetics, Inc. (NASDAQ: SGEN) trades around $20.50, above the $19.15 consensus analyst price target.  The company is expected to lose money in 2011 and 2012. With a 52-week range of $12.29 to $22.37, its market cap is $2.35 billion, and it trades at close to 9-times book value.  Implied Upside: NEGATIVE by -6.5%.

Theravance, Inc. (NASDAQ: THRX) trades around $21.40 and analysts have a price target of $27.43 for the stock.  The company is another one expected to lose money this year and next.  The 52-week range is $16.44 to $28.95, the market cap is $1.8 billion, and it is another one that trades with a negative tangible asset level.  Implied Upside: 28%.

ViroPharma Incorporated (NASDAQ: VPHM) trades around $19.00 and the consensus price target is $23.54. Due to an expected drop in royalties, its earnings are expected to be halved in 2012 versus 2011.  Its 52-week range is $14.39 to $22.16, its market cap is about $1.45 billion, and it trades at about 1.5-times its stated book value with a large portion of assets as intangible assets.  How this one looks on a standalone basis through time is a guess.  Implied Upside: 24%.
*******

On all of these implied upsides, please be sure to do your own research.  We encourage our readers to challenge Wall Street analysts rather than merely following them blindly.  Many cases have been there before were the analysts were just dead wrong.  We also cannot help but notice how the biotech sector often has two very same observations based upon the exact same set of data, yet one analyst will say “Buy” and the other will say “Sell.”

JON C. OGG

M&A Bonanza For Drug & Biotech in 2011 (MRK, PFE, ALXN, DNDN, HGSI, CEPH, UTHR, CADX, AMAG, SNY, GENZ, AMGN, BEC, TEVA, SGMO, LLY, ALTH, CBST, VVUS, AUXL, VRTX)

January 29, 2011 · Filed Under Acquisitions, Anemia, Cancer, Cardiac, dendreon, Diabetes, Heart, Infections, M&A, obesity, R&D, Rumor · Comment 

The game of predicting mergers and acquisitions in the biotech and in pharma sectors is not a new one.  The talk heats up, then it dies down.  A deal comes, followed by another deal, and the activity goes quiet.  This next week is likely to have at least more chatter in the biohealth sector for possible mergers and acquisitions after Barron’s gave a cover story called “The New Doctor in the House: Consolidation.”

Barron’s noted that “as big drug firms buy up smaller, specialty outfits and their most innovative products, better pipelines and sales-force efficiency will boost profits.”  Here is the thing to consider: Barron’s did not really offer anything new or ground-breaking this weekend.  It will have rekindled some hope that M&A is coming in the space.  At issue: pipeline fatigue.  A note we’d throw in as well, dead-dead stocks.  We are going to at least address some of the Barron’s roster, but we want to show you many others which are just as or even more likely acquisition targets.  Some of ours have even been in-play before.

Barron’s threw in Merck & Co. (NYSE: MRK) and Pfizer, Inc. (NYSE: PFE) as the largest of the Big Pharma players and it threw out biohealth names with stock-market values below $10 billion:

  • Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) with a $7.5 billion value after a hueg run-up;
  • Dendreon Corporation (NASDAQ: DNDN) for Provenge for prostate cancer (and future cancers) with a $5 billion market value today;
  • Human Genome Sciences, Inc. (NASDAQ: HGSI) for its Benlysta in patients with severe active lupus nephritis and CNS lupus and a $4.5 billion market cap;
  • Cephalon, Inc. (NASDAQ: CEPH) is one we have rarely looked as since things quieted down there;
  • United Therapeutics Corporation (NASDAQ: UTHR) for its treat pulmonary arterial hypertension and an almost-$4 billion value;
  • Cadence Pharmaceuticals Inc. (NASDAQ: CADX) was noted for its pain medication without the addiction aspects of morphine and its value is only $369 million;
  • AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) was called a value stock despite its recent weak sales and despite its cash burn with a $368 million market cap.

Much of the biotech M&A game hinges on Sanofi-Aventis (NYSE: SNY) in its chase to acquire Genzyme Corporation (NASDAQ: GENZ).  The latest talk is that a work-out could come to $80 all-in if certain milestones were achieved but the deal is still south of there officially.  As noted above, we have our own opinions on which biotech companies and drug companies could find their way into the hands of a larger acquirer.

Amgen Inc. (NASDAQ: AMGN) is likely to continue being an acquirer.  The company recently announced a deal worth potentially $1 billion to acquire privately-held BioVex.  Last year the company said it was aggressively looking for new targets and its $52 billion market cap is the largest of all the independent biotechs in America. The company has more tricks up its sleeve.

Beckman Coulter Inc. (NYSE: BEC) went into play in early December with private equity firms being the likely acquirers of the portfolio of biomedical testing equipment and supplies.  We argued at the time of the premium that it seemed shares fully reflected that value, and shares are actually lower now.

And don’t forget Sangamo Biosciences Inc. (NASDAQ: SGMO), where shares rallied in November on rumors of a potential bid interest from Eli Lilly & Co. (NYSE: LLY).  It had good news on ZFP Therapeutic program to develop SB-509, a zinc finger protein transcriptional activator (ZFP-TF) of the vascular endothelial growth factor (VEGF)-A gene as a treatment for ALS and the news flow has continued to propel shares higher.  It went above $4.50 on the rumors but now shares trade at $7.39.  The market cap is still low here at $334 million.

Allos Therapeutics, Inc. (NASDAQ: ALTH) has been another name floated out there for M&A possibilities, but things are looking less and less bright for the company.  Shares hit a 52-week low just on Friday.

Cubist Pharmaceuticals Inc. (NASDAQ: CBST) has not really gone anywhere as it is deemed a mature company, but it is one we thought for sure that would find its way into being part of a larger company.  Its Cubicin is on the market and it fights severe hospital-induced infections and the market cap is $1.3 billion here.

VIVUS Inc. (NASDAQ: VVUS) remains a wild card due to the FDA.  Diet and weight-loss pills have not been given any real love by the FDA.  The exception here is that Qnexa does have serious benefits.  There are side effects, particularly in cases of pregnancy.  We would ask this though: How many pregnant and soon-to-be-pregnant women really diet?  Most doctors don’t even want pregnant women taking supplements, let alone drugs.  IF the FDA approves Qnexa, that $680 million market cap may be worth far more.

Teva Pharmaceutical Industries Limited (NASDAQ: TEVA)… We have also noted Teva’s mega-cap ambitions, and making more acquisitions would generally get there.

Last year, Morningstar put out a list of three favorites that it sees as acquisition targets in the biohealth space: Auxilium Pharmaceuticals Inc. (NASDAQ: AUXL), Human Genome Sciences Inc. (NASDAQ: HGSI), and Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX).  FULL ARTICLE

This should at least give you a better and more concise list of possible deals and deal-makers for 2011.  Just remember this, regardless of what Barron’s or other media outlets try to tell you: not all biotechs have to be acquired, not at all.

JON C. OGG

The Changing Landscape of Biotech Valuations (ACOR, CBST, MNKD, INCY, SGEN, ITMN, IPXL, MRX, SVNT, VPHM)

March 6, 2010 · Filed Under Cancer, Cardiac, Diabetes, Financial, General, generic drugs, M&A, R&D · 1 Comment 

The biotech and biohealth universe is changing in size.  In 2008 and 2009, partly due to mergers and partly due to market valuations, there had become a surprisingly small number of biotech stocks which had market capitalization rates of more than $1 billion.  At one point there were only about 10 or 11 in our universe of biotech stocks that actually had market caps which were very far north of $1 billion, or at least out of the biotech stocks which followed at BioHealth Investor.

We have recently seen Acorda Therapeutics, Inc. (NASDAQ: ACOR), Cubist Pharmaceuticals Inc. (NASDAQ: CBST), MannKind Corporation (NASDAQ: MNKD), Incyte Corporation (NASDAQ: INCY), Seattle Genetics, Inc. (NASDAQ: SGEN), InterMune, Inc. (NASDAQ: ITMN), Impax Laboratories Inc. (NASDAQ: IPXL), and Medicis Pharmaceutical Corporation (NYSE: MRX) either get into or get back into the $1 billion market cap club.  And then we have Savient Pharmaceuticals Inc. (NASDAQ: SVNT) and ViroPharma Incorporated (NASDAQ: VPHM) that have been in the club and are currently just short of it.

Due to waves of big emerging drug news and due to strong performance we now have 16 of the biotech and related stocks (at least of those which we cover as pure biotechs) which have market caps north of $2 billion.  More importantly, the biotech news flow and he bull market has suddenly helped many stocks rise or at least get back above the $1 billion mark.  Many of these had been there before, but the market has helped many new names get back above the $1 billion market capitalization level.  And waves of mergers in the last two and three years sort of thinned out the group.

In these we did not take into consideration revenues, earnings, and not even cash.  This has largely been news-driven and momentum-driven.  Below is a review of each.

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Value Stocks in Drugs & Biotech (AMGN, BIIB, CBST, CEPH, PDLI)

November 21, 2009 · Filed Under Cancer, Financial, generic drugs, M&A, multiple sclerosis, R&D · Comments Off 

This weekend we ran screens of several drug and biotech companies in our quest for ‘cheap stocks’ in the BioHealth sector.  The intent is not solely for buyout targets because we prefer to look at value stocks rather than just picking buyout hopefuls.  The obvious issue that makes most of these cheap is because there have been problems or have been issues that made these look cheap on the surface.  To look for sub-market valuations, we used Thomson Reuters estimates for 2009 and 2010 earnings.  We then set a maximum target of 15-times earnings and screened out the companies that gave the ‘false positives’ as there were many.

Amgen Inc. (NASDAQ: AMGN), Biogen Idec Inc. (NASDAQ: BIIB), Cephalon Inc. (NASDAQ: CEPH), Cubist Pharmaceuticals Inc. (NASDAQ: CBST), and PDL BioPharma, Inc. (NASDAQ: PDLI) all made the cut.  We initially wanted to look for market caps over $1 billion, but we set the bar at $500 million and tried to focus on companies with growth.  We included valuation data, performance, and some color on each name.  Some, but not all of these, are also in our upcoming biotech buyout targets for 2010.

Amgen Inc. (NASDAQ: AMGN) is one we have long noted during its waves of problems and as it was under future reimbursement pressure that may be more like an old fashioned drug company now as it has matured.  The company’s market cap is $56 billion, which is actually now the largest market cap since Genentech is now Roche.  Its stock trades at $55.48 and its 52-week trading range is $44.96 to $64.76. Because of the pressure and past issues, it trades at only about 11-times earnings for 2009 ($5.03 est.) and 2010 ($5.14 est.) both.  It also trades at under 4-times 2009 and 2010 revenue expectations and it sits with an arsenal of almost $14 billion in cash and equivalents, yet has over $10.5 billion in long-term debt.

Biogen Idec Inc. (NASDAQ: BIIB) is no stranger to issues… another activist was just out this week calling for more action and the company has not been able to get out from under the TYSABRI PML despite the notion that this is a very low risk.  At $46.38, its market cap is $13.4 billion and its 52-week trading range is $37.21 to $55.34.  Biogen has over $3.1 billion in cash if you include its short-term and long-term investments and it carries just under $1.1 billion in long-term debt.  Biogen also trades at 11.6-times the $3.99 EPS target for 2009 and only 10.5-times the $4.42 target for 2010; and Biogen trades at 3-times 2009 expected sales.  The risk is here is of course the TYSABRI risks.  You never know if they will have to pull it again.  This is an opinion rather than a formal target, but TYSABRI is good enough in treatments of MS that it could quite literally have two or three times the number of patients using it if the PML risk can either be quantified better or could be mitigated.  Another issue is that it is trying to acquire Facet Biotech Corporation (NASDAQ: FACT) as a diversification and added pipeline move.
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Top Analyst Upgrades-Downgrades in BioHealth Sector (BMRN, CBST, CYTK, ELN, PPDI, RGEN)

October 29, 2009 · Filed Under Financial · Comments Off 

This morning we have seen an unusual number of analyst upgrades and downgrades in the drug and biotech space that comprises BioHealth.  These are the top analyst upgrades, downgrades, and initiations in the BioHealth sector this Thursday morning:

  • BioMarin (NASDAQ: BMRN) Raised to Outperform at Credit Suisse.
  • Cubist Pharmaceuticals (NASDAQ: CBST) Raised to Perform at Oppenheimer.
  • Cytokinetics (NASDAQ: CYTK) Cut to Hold at Needham.
  • Elan Corp. plc (NYSE: ELN) Cut to Neutral at UBS.
  • Pharmaceutical Product Development (NASDAQ: PPDI) Cut to Market Perform at Wells Fargo.
  • Repligen (NASDAQ: RGEN) Cut to Sector Perform at RBC Capital.

If you like analyst upgrades, downgrades, and initiations, you can join our open email distribution list from 24/7 Wall Street to get updates on top analyst upgrades and downgrades, top day trader alerts, IPO’s, secondary offerings, Warren Buffett and other guru activity, M&A and more.

JON C. OGG

Sepracor: A Thought Of A Higher Price… (SEPR, CBST, ONXX, GERN, VNDA, REGN, SGEN, ALNY)

September 9, 2009 · Filed Under M&A · Comments Off 

It is common that when mergers are announced that some shareholders are either unsatisfied or want more.  Sepracor Inc. (NASDAQ: SEPR) and its proposed $2.6 billion sale to Dainippon Sumitomo Pharma Co. might not be enough to satisfy everyone involved in the shareholder side of the deal.  That is the case if you read a Bloomberg report from Tuesday night and this could be the first of many such suits.

It appears that the allegations are that the terms of the merger are detrimental to shareholders because of a break-up fee and shopping provisions.  This is an effort either to block the merger or to secure a higher price and better terms.  So here is how the $23.00 stacks up… It was a 27.6% premium to the September 1 price, but was a 48% premium to the 6-month average.

This deal does make-whole anyone who bought shares over the last year.  But it comes with a huge hit for many investors who have been in it for the long-term.  From the end of 2004 to mid-2007 this was generally a $40 to $60 stock.  Then it was a $30 stock and the stock was in the low $20′s to $30 for most of the period from mid-2007 to mid-2008.

If you look at the deal on a valuation basis, it seems very cheap.  The Thomson Reuters figures for 2010 are $2.91 EPS and $1.26 billion in revenues for 2009 and $2.99 EPS and $1.31 billion in revenues for 2010.  In short, The company is selling for less than 8-times a blended earnings estimate and just over 2-times revenues for a blended time horizon.

Any time a merger is seemingly based upon a 52-week high, it is hard to feel too sorry for investors.  At least until you start looking at the multiple of earnings being so low.  We screened recently for all of the low P/E stocks in drug and biotech and there are still many other low P/E multiples in there.

We also are putting together another piece right now containing the following stocks as merger candidate discussions:

  • Cubist Pharmaceuticals Inc. (NASDAQ: CBST)
  • Onyx Pharmaceuticals Inc. (NASDAQ:ONXX)
  • Geron Corporation (NASDAQ: GERN)
  • Vanda Pharmaceuticals, Inc. (NASDAQ: VNDA)
  • Regeneron (NASDAQ: REGN)
  • Seattle Genetics Inc. (NASDAQ: SGEN)
  • Alnylam (NASDAQ: ALNY)

JON C. OGG
SEPTEMBER 9, 2009

More Biotech/Drug Mergers Coming? (SEPR, CBST, ONXX, GERN, VNDA, REGN, SGEN, ALNY)

September 4, 2009 · Filed Under M&A · Comments Off 

This week came a merger of at least one of the drug and biotech players we expected to occur.  That was in Sepracor (NASDAQ: SEPR).  We will be putting together a list of much more detailed picks in teh sector this coming week.

Some of these are our own picks which we think should be acquired, and some are current biotech-drug targets which others feel are on deck.  To see the full deal on how this related, BioMedReports.com has a full breakdown on teh Spreacor terms and we used this for determining value on some of our other picks….

Among the picks being presented in detail next week are as follows:
Cubist Pharmaceuticals Inc. (NASDAQ: CBST)
Onyx Pharmaceuticals Inc. (NASDAQ:ONXX)
Geron Corporation (NASDAQ: GERN)
Vanda Pharmaceuticals, Inc. (NASDAQ: VNDA)
Regeneron (NASDAQ: REGN)
Seattle Genetics Inc. (NASDAQ: SGEN)
Alnylam (NASDAQ: ALNY)

Have a great weekend and stay tuned for the full details on these and others next week.

JON C. OGG
SEPT. 4, 2009

Value in Biotech: Do Low P/E Ratios Make For Cheap Stocks? (AMGN, BIB, CEPH, CBST, GENZ, PDLI)

August 22, 2009 · Filed Under Cancer, fda, multiple sclerosis, politics · Comments Off 

Biotechnology has historically been a very tough segment for investors to find “value” in.  Usually, the multiples of earnings and revenues are high and many of the emerging companies have no revenues or earnings and will not for years to come.  Yet we recently found a study of biotech analysts, investors, and portfolio managers from BIO and Thomson Reuters which showed how many influential investors in the new tougher world of lower valuations are looking at traditional low-price/earnings ratios and other traditional investment valuation metrics in evaluating biotech stocks.  So this week we ran a screen of some of the top 50 biotech stocks and wanted to review the following companies:

Amgen Inc. (NASDAQ: AMGN)
Biogen Idec Inc. (NASDAQ: BIIB)
Cephalon Inc. (NASDAQ: CEPH)
Cubist Pharmaceuticals Inc. (NASDAQ: CBST)
Genzyme Corporation (NASDAQ: GENZ)
PDL BioPharma, Inc. (NASDAQ: PDLI)

In each of these we reviewed the share prices and why these are trading where they are.  We also gave detailed data from Thomson Reuters for 2009 and 2010 consensus earnings and revenue estimates, as well as what their forward P/E and Times-Revenues figures are.  Also included are average analyst target prices and any recent calls.  We also gave the caveats, issues, or suppositions behind each company and a layout of what lies ahead.  We also had a market cap criteria, and while all of these companies are over $1 billion in market cap we were willing to look down as low as $400 million.  These six companies also greatly exceeded our average daily volume minimum of 250,000 shares.

Lastly, these were reviewed alphabetically rather than by any order of preference because each company and each case is rather unique.
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Biotech Short Selling Positions (XBI)(VRTX)(UTHR)(REGN)(MATK)(GENZ)(CBST)(BMRN)(BIIB)(ALNY)(AMGN)

August 12, 2009 · Filed Under General · Comments Off 

There were some major moves in the short positions in major biotechs for the period ending August 11.

Amgen (AMGN) short interest was flat at 21 mllion shares.

Alnylam Pharmaceuticals (ALNY) share short rose 2% to 5.8 million.

Biogen Idec (BIIB) short interest dropped a fraction to 9.1 million.

BioMarin Pharmaceutical (BMRN) shares short dropped 6% to 11.7 million.

Cubist Pharmaceuticals (CBST) short interest dropped 8% to 4.8 million.

Genzyme Corporation (GENZ) share sold short fell 5% to 5.7 million.

Martek Biosciences (MATK) shares short rose 2% to 4.2 million.

The short interest in Regeneron Pharmaceuticals (REGN) rose 9% to 5.9 million.

United Therapeutics (UTHR) shares sold short moved down 10% to 3.1 million.

Vertex Pharmaceuticals (VRTX) shares short dropped 2% to 18.1 million

These ten stocks are the top holding of the SPDR S&P Biotech ETF (XBI)

Data from NYSE and Nasdaq

Douglas A. McIntyre

Five Fast-Growing Biotechs To Watch Right Now (ALNY, FOLD, HALO, AOB, STEM)

July 6, 2009 · Filed Under Cancer, daily, fda, General, stem cells, vaccine · Comments Off 

Alnylam (Nasdaq: ALNY) leads a short list of some of the fastest-growing biotech stocks where analyst estimate revisions continue to rise.

BioHealth Investor began by analyzing 171 stocks in the biotech sector based on revenue growth over the trailing four quarters, identifying 30 stocks in the sector with better than 50 percent revenue growth over the past 12 months.

We then screened those 30 stocks to look for those very few names that have seen both strong growth in at least the past two years and positive analyst estimate revisions in recent months, in an effort to find stocks with strong trends that still have potentially improving operations going forward.

The work resulted in growth biotech stocks to watch: Alnylam Pharmaceuticals Inc. (Nasdaq: ALNY), Amicus Therapeutics Inc. (Nasdaq: FOLD), Halozyme Therapeutics Inc. (Nasdaq: HALO), American Oriental Bioengineering Inc. (NYSE: AOB), and Stemcells Inc. (Nasdaq: STEM).

1) Alnylam:

With a new class of potential biotech medicines, aggressive goals for development and partnerships, cash on the books and a large addressable market, Alnylam tops our short list of biotechs with strong growth and increasing analyst estimates.

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