3 Bargain Biotechs to Buy

3 Bargain Biotechs to Buy May 4, 2016
By Alex Keown, BioSpace.com Breaking News Staff

NEW YORK – Are you looking for a good biotech or pharma company to add to your portfolio, but just aren’t sure what to buy given the weak showing of pharma stocks this year? Well, analysts at the Motley Fool suggest three companies, United Therapeutics , Gilead Sciences and Endo International PLC , that need to be included in your portfolio.

United Therapeutics

Shares of United Therapeutics are currently trading at $109.88, although the stock has declined from a 2016 high of $131.87 per share in March. The company, which is developing drugs for pulmonary arterial hypertension, continues to see strong growth based on sales of its products Adcirca and Orenitram. Todd Campbell, of E.B. Capital Markets, said the company is in the process of a $500 million stock buyback, which makes the company worth looking at for investors. The company is also under new leadership following the stepping down of the company’s president and chief operations officer a few days ago.

Gilead Sciences

Shared of Gilead Sciences have dropped from a 2016 high of $102.29 per share in April to its current price of $86.16 per share. Gilead currently dominates the HCV market, with its two blockbuster drugs Harvoni and Sovaldi generating about $20 billion in revenue for 2015. Although the company was ordered to shell out $200 million to Merck for patent infringement for its drugs and faces competition from Merck ’s recently approved HCV drug, Zepatier, the company remains in a strong position. While there is some competition in the HCV market, Gilead is not resting on its laurels in that area. In January, Gilead submitted a New Drug Application to the U.S. Food and Drug Administration for tenofovir alafenamide, an investigational, once-daily treatment for adults with chronic hepatitis B virus infection. The company is also continuing to use Sovaldi in combination with other drugs, including a triplet drug comprised of Sovaldi, velpatasvir, and a protease inhibitor for the treatment of genotype 3 HCV patients. Also, in the waning days of 2015, Harvoni was approved for expanded use in patients with genotype 4, 5 and 6 chronic hepatitis C virus (HCV) infection and in patients co-infected with HIV by the U.S. Food and Drug Administration.

Gilead also has a strong position in the HIV market, which is another reason Campbell touts acquiring shares of the company, shares which he disclosed he owns.

Endo International PLC

Shares of Endo International have steadily slid since a February high of $54.30. The stock is currently down more than 50 percent since then, trading at $26.76 per share as of this morning. Despite the decline in stock value, Campbell said the company has made some moves over the past year which will likely benefit it in the long run, including the $8.5 billion acquisition of privately-held Par Pharmaceutical Holdings to spur sales growth in generic medications. The acquisition of Par brings approximately 100 products in multiple dosage forms and delivery systems, including oral solids, oral suspensions, injectables and high barrier-to-entry products. The company has also divested itself of several divisions that were capital resource drains, including its AMS Men’s Health business and Astora Women’s Health, the maker of vaginal mesh used to treat pelvic organ prolapse in addition to urinary incontinence.

Additionally, Endo saw regulatory approval of chronic pain drug, Belbuca. The company said sales of Xiaflex, a drug used to treat Peyronie's disease, have also grown, hitting $50 million in the fourth quarter.

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