NEW YORK (TheStreet) -- Medicines (MDCO) - Get Medicines Company Report stock is soaring by 16.14% to $39.08 on heavy trading volume on Monday morning, after the drug maker along with AlnylamPharmaceuticals (ALNY) - Get Alnylam Pharmaceuticals, Inc Report on Sunday announced positive initial results of ALN-PCSsc, a new cholesterol drug.
Following the administration of the drug, Phase 1 study results displayed up to 83% lowering of LDL-C, the "bad" cholesterol, the companies stated.
"Moreover, we imagine that ALN-PCSsc has the potential to open new innovation horizons with patients, providers, and payers by linking the temporal cycle of LDL-C monitoring with administration of therapy," David Kallend, Medicine's VP and global medical director said in a statement.
By the end of the year, the companies will conduct a mid-stage study along with late-stage trials at the end of 2017.
Based on these promising results, analysts expect Medicines to reach sales of $1.6 billion this year, up from last year's revenue of $724.4 million, The Wall Street Journal reports.
As of 11:25 a.m., more than 9.9 million shares had changed hands, above the company's average trading volume of about 1.3 million shares.
Separately, TheStreet Ratings team rates MEDICINES CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate MEDICINES CO (MDCO) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, MDCO has a quick ratio of 2.47, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for MEDICINES CO is rather high; currently it is at 67.25%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -51.49% is in-line with the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 803.5% when compared to the same quarter one year ago, falling from -$5.16 million to -$46.59 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Pharmaceuticals industry and the overall market, MEDICINES CO's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: MDCO Ratings Report