Biotechnology investors often have to make bets based more on promise than profit. That’s because it takes years and hundreds of millions of dollars to advance new medicine through clinical trials to market, so investing in biotech stocks is more of a gamble than investing in other industries.
Having said that, there are a number of biotech stocks that make money and that are expected to see their earnings jump in the coming year, including these three that caught my eye. NPS Pharmaceuticals (NASDAQ NPSP) is an intriguing company because it has one fast growing drug, one drug with an FDA decision approaching quickly, and a royalty revenue stream that kicks off nine figures annually.
The company’s fast-growing drug is Gattex, a treatment that won FDA approval in 2012 for use as a treatment for short bowel syndrome, or SBS. Sales of Gattex reached $22 million in the second quarter, up from less than $5 million the year before, prompting NPS to guide for full year product sales of $100 million-$110 million this year, up 200% from 2013.
Biotech Stock News
ANI Pharmaceuticals (NASDAQ ANIP) doesn’t have a lot of revenue, but it delivers a good portion of it to the bottom line. The company expects sales of between $28 million and $30 million this year to result in EPS of between $0.90 and $1.00.
ANI Pharma’s second-quarter sales advanced 8% year over year, but thanks to acquisitions last year sales for its first six months have jumped 50% to $17.5 million. The company also acquired a portfolio of 31 abbreviated new drug applications from Teva Pharmaceuticals (NYSE TEVA) and hopes to launch its first product from that purchase by year end.
Other Biotech Stocks
Insys Therapeutics (NASDAQ INSY) gets most of its sales from Subsys, an under-the-tongue spray formulation of the opiate drug fentanyl.
Since launching Subsys in 2012, sales have marched steadily higher, allowing Insys to capture more than a 30% share of the fentanyl market for treating breakthrough cancer pain. In the second quarter, Subsys sales totaled $54 million, up 195% year over year, allowing Insys to fund an expanding R&D pipeline and grow its cash on hand by $18 million to $75 million.
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