Coolcat's Small-Cap Biotech Trio
10/28/2015 7:00 am EST
Kevin Kennedy uses a momentum-based strategy focused on stocks that have pulled back from recent highs and are poised to regain new highs. Here, the editor of The Coolcat Report highlights a trio of biotech ideas.
Lipocine (LPCN) develops pharmaceutical products using its oral drug delivery technology in the areas of men and women's health.
The company is expected to cut losses from $1.12 per share in the past year to just $0.14 per share in the next four quarters.
It has no sales, but its $2.41 per share in cash provides a nice cushion and its smallish market cap of $234 million creates opportunities for further upside.
The stock made my screens at about $8 in June. It then surged as high as $19.23. It now sits 33% off its high. Despite the pullback, it’s still up 173% in the past year.
Heron Therapeutics (HRTX) develops products to address unmet medical needs using its proprietary polymer-based drug delivery platform to enhance injectable pharmaceuticals.
Its lead product candidate includes SUSTOL (granisetron injection, extended release), which is in Phase III clinical trial for the prevention of acute- and delayed-onset, chemotherapy-induced nausea and vomiting.
Its other trial candidates address the management of post-operative pain, chronic pain and opioid addiction and aim to prevent chemotherapy-induced nausea and vomiting.
The company has no sales, trailing annual losses of almost $3 per share, and a market cap of $847 million. But it’s also expected to shave about a dollar a year off its losses going forward and is sitting on almost $5 a share in cash.
Although the stock has still more than tripled in the past yea, it has dropped 44% off its September 23 high.
The company has been public since 1987 and has burned a lot of investors over the years. It once fetched more than $900 per share on a split-adjusted basis.
Lexicon Pharmaceuticals (LXRX) focuses on the development of pharmaceutical products to treat carcinoid syndrome, type 1 and type 2 diabetes, irritable bowel syndrome, autoimmune disease, and glaucoma.
The company lost $1.13 per share in the past four quarters and is expected to lose even more going forward.
But it also has almost $3 per share in cash. The company has a healthy market cap of $1.2 billion and $24 million in annual sales.
The stock jumped 61% on August 3 on monster volume of more than 32 million shares after reporting positive results for its bowel movement drug.
The stock is up 74% year to date, but has slipped 30% off its September 17 high of $15.79 in the past month.
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