Collegium Prescribed drugs (NASDAQ: COLL) and Athénex (NASDAQ: ATNX) They may not be the preferred shares out there by way of media protection, however each might simply make you wealthy with an funding on the proper time. Not like lots of their compatriots within the small-cap biotech world, these two corporations usually earn recurring revenues. Whereas neither have constantly worthwhile trades in the mean time, proof suggests they will accomplish that within the subsequent few years, making them an awesome candidate for investor portfolios.
Furthermore, these two actions have related paths to profitability: growing the gross sales quantity of their present merchandise out there whereas finalizing their pipeline tasks at a complicated stage and orienting them in direction of commercialization. Rather a lot will occur with these corporations within the close to time period, and rising buyers ought to be very cautious if they’re to have any likelihood of reaping the rewards of their success. Let’s dive in and discover the views of Collegium and Athenex.
1. Collegium bought its first glimpse of the advantages
Collegium, a ache medication firm, derives its income from opioid ache relievers which have been formulated for sustained launch. By altering the formulation of those extremely efficient medication to incorporate delayed launch and different anti-abuse options, Collegium hopes to steal market share from producers of generic opioid ache medicines in addition to branded opioid ache relievers, which embody each a excessive threat of dependancy. Given the state of the opioid abuse epidemic in the US, Collegium’s method might present clinicians with the ache reduction instruments their sufferers want, however with out as a lot threat of ache. future abuse.
Collegium has three merchandise which are authorised on the market, together with its oxycodone prolonged launch tablets Xtampza for ache reduction. Since its regulatory approval in 2016, Xtampza has confirmed to be well-liked. The drug holds 23.5% of the sustained-release oxycodone market within the second quarter of 2020, ended June 30, in comparison with 21.8% of the market share within the first quarter. The corporate expects the drug’s market share to extend via new growth exercise, which is predicted to result in two new therapeutic formulations within the close to future.
Within the meantime, Collegium posted a revenue for the primary time within the final quarter, due to Xtampza gross sales of $ 33.6 million – a 29% enhance from the identical quarter final 12 months. However its profitability remains to be fragile, with a margin of lower than 1%. Nonetheless, Xtampza’s progress seems to be accelerating reasonably than slowing down, placing Collegium on a trajectory that would enrich its shareholders as a result of its merchandise are setting the usual for ache reduction, significantly in areas the place opioid abuse is widespread.
2. Athenex is getting ready its section 3 packages for the market
Athenex develops most cancers therapies utilizing a large number of approaches starting from conventional chemotherapy medication to stylish mobile immunotherapies. Like Collegium, Athenex presently derives recurring income from manufacturing new formulations of long-standing and well-liked medication. The corporate additionally operates a compound pharmacy enterprise, which it makes use of to supply licensed oncology medication. Within the final quarter, Athenex’s quarterly income elevated 82% from the prior 12 months interval to $ 40.2 million because of elevated demand for specialty medication brought on by the pandemic. Athenex will not be but worthwhile, however the true attraction of biotechnology as a inventory lies within the progress potential of its drug growth pipeline.
Athenex’s flagship program is its potential mixture of paclitaxel and enequidar for metastatic breast most cancers. Not like the standard formulation of paclitaxel, a chemotherapy drug, the Athenex formulation might be taken orally reasonably than by intravenous infusion due to the inclusion of enequidar. Encequidar prevents the gastrointestinal tract from absorbing paclitaxel, thus lowering the depth of disagreeable chemotherapy unwanted effects like nausea and vomiting whereas permitting it to remain within the affected person’s system longer, thus growing its helpful results. on tumors. Up to now, this mix remedy seems to be efficient. The outcomes of the Part 2 scientific trials point out that each one 22 sufferers within the trial with aggressive and incurable angiosarcomas skilled tumor discount after remedy.
Athenex is presently pursuing Part 3 scientific trials for a handful of various indications with oral paclitaxel, however can be awaiting judgment from the US Meals and Drug Administration (FDA) on the drug. breast most cancers remedy approval. Which means that the corporate might promote the remedy available on the market by the primary quarter of subsequent 12 months. If its drug is authorised, will probably be a optimistic signal that the corporate’s method is legitimate and Athenex ought to begin producing new income shortly. And, if lowering chemotherapy unwanted effects proves to be as well-liked with clinicians and sufferers as one may count on, Athenex is more likely to be on its option to getting richer, with its early buyers. .
This text represents the opinion of the author, who could disagree with the “official” advice place of a premium Motley Idiot consulting service. We’re motley! Difficult an funding thesis – even considered one of our personal – helps us all to suppose critically about investing and make choices that assist us turn out to be smarter, happier, and richer.