Good or Bad? Pharma Bro Thinks Jazz Pharma Could be Worth $20 Billion, Calls Mast Therapeutics 'Worthless'
September 13, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Although indicted on seven counts of securities fraud and widely excoriated among the pharmaceutical industry for his behavior following the 5,000 percent increase of a 65-year-old toxoplasmosis drug while helming startup Turing Pharmaceuticals, Martin Shkreli is still sought out for his stock advice.
As a former hedge fund manager, Shkreli is certainly experienced in reading the tea leaves when it comes to investing in the biotech industry. On a recent episode of Benzinga’s Premarket Prep, Shkreli put in his two cents when it comes to investors jumping into the sector. He highlighted two stocks, Jazz Pharma and Mast Therapeutics Inc.
When it comes to Jazz, Shkreli said the stock is undervalued. Shkreli said the stock could actually be worth “double the stock price.” Shares of Jazz Pharma are trading at $120.66 this morning. Since a July high of $154.22 per share, the stock has slid. Shkreli said he likes Jazz due to its acquisition of Gentium in 2013 and its narcolepsy drug Xyrem. Jazz posted strong earnings last year led by its close-to-being-a-blockbuster drug Xyrem, used to treat narcolepsy, which generated $955 million in sales. The company also saw strong revenue streams from its acute lymphoblastic leukemia chemotherapy drug Erwinaze, which generated $203 million in sales. Jazz also saw regulatory approval of Defitelio for hepatic veno-occlusive disease in March, which should also be a strong revenue driver. Additionally, in May, Jazz snapped up New Jersey-based Celator Pharmaceuticals for about $1.5 billion. The deal brings Celator’s lead drug VYXEOS, an investigational treatment for acute myeloid leukemia and other blood cancers, into Jazz’s pipeline. Celator is looking to achieve regulatory approval in the U.S. and Europe for VYXEOS. Analysts at the Fool estimate VYXEOS could generate $1 billion in annual sales. Its moves like this that had Shkreli suggesting Ireland-based Jazz could be worth $15 to $20 billion, as opposed to its current value of $7 billion.
Shares of San Diego-based Mast Therapeutics are down this morning, trading at 57 cents per share. The stock is down from a one-year high of 67 cents per share, a high it hit only days ago on Sept. 7. In his analysis, Shkreli called the stock “worthless.”
“This is a company that's probably, I would say, worthless, that's gonna drop 90 percent or more in the next few weeks,” Shkreli said according to the Benzinga write-up.
Although he offered no specifics as to why he thinks Mast will fall, Shkreli suggested the company does not have strong cash reserves and is “praying to hit the lotto.”
Mast is developing therapies for sickle cell disease and heart failure, including its lead product, vepoloxamer.