Antares: A "New World" for Biotech

05/05/2017 2:50 am EST

Focus: HEALTHCARE

Michael Murphy

Former Editor, New World Investor

I expect the biggest stock winners in coming years to be in biotechnology, explains Michael Murphy, growth stock expert and editor of New World Investor.

The drive to produce, innovate and cure is so strong in biotech, especially in the smaller drug companies, that knocking one out of the park is not only possible, but probable.

My current recommendations focus on finding the next big winners and companies that will offer solid profits from effective drugs. Just don’t buy these types of stocks if you are planning to go to a desert island for the next five years, as we may trade in and out of these stocks.

Antares Pharma (ATRS) makes drug delivery systems regulated as devices -– injectors, disintegrating tablets and transdermal gels.

The company's partner, Teva Pharmaceuticals (TEVA), is making a push to take 10% of the U.S. human growth hormone market using Antares’ needle-free injector, and is working on an epinephrine injector.

Anturol was approved and Actavis is distributing it. Otrexup was approved for self-injection of methotrexate for rheumatoid arthritis, and launched early in 2014.

Antares was recommended as a new Strong Buy by Raymond James with a $4.30 target. The analyst said its business model diversity provides management with multiple value creation levers in the generics arena, targeting the $70 billion US auto-injector and pre-filled syringe market.

The company can serve as life-cycle extension partner for branded assets facing end of life crisis or capture the full economic value of ATRS-developed proprietary drugs.

ATRS is a Core Holding; buy up to $5 for a $10 target price after Otrexup is widely adopted. The primary risk with the stock is that Otrexup prescriptions stop growing.

My ultimate target price for the stock is still $50 a share in three to five years, as they and their partners introduce numerous new products.

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