10 Health-Care Stocks Outperforming the Index

NEW YORK (TheStreet) -- Aveo Pharmaceuticals (AVEO), BioSante Pharmaceuticals (BPAX), Cornerstone Therapeutics (CRTX) and Achillion Pharmaceuticals (ACHN) are among a few health-care stocks that outperformed the index during the past one month.

These stocks may continue to outstrip the index on strong fundamentals, company outlook, and analysts' potential upsides. During the last one month, these stocks have gained between 18% to 80%, compared to a 4% drop registered by the Nasdaq.
10. SuperGen ( SUPG) engages primarily in the discovery, development and commercialization of cancer therapeutics. It acquires products developed by other companies and applies additional developmental effort to expand sales, or advance these products clinically toward marketing approval. The stock has gained 17.6% during the past one month.

Net revenue for the first quarter of 2011 was reported at $17.1 million compared to $14.4 million in the year-ago quarter. Total revenue includes royalty of $17 million, up from $14.3 million for the same period in the prior year. Net income stood at $5.5 million (9 cents per share), increasing 17.5% from $4.7 million (8 cents per share) in the year-ago quarter.

As of March 31, 2011, the company had approximately $129.5 million in unrestricted cash, cash equivalents and current and non-current marketable securities compared to $120.4 million as of Dec. 31, 2010 as cash flow from operations rose 83.9% to $10 million. The company has a current ratio of 16.51 and no debt.

Going forward, SuperGen expects royalty revenue for Dacogen to increase up to 5% from the prior year to range from $52 million to $55 million. However, net income forecast has been modified to less than $12 million for 2011 from the prior guided net income of less than $14 million.

All the three analysts covering the stock recommend buying it. There are no sell ratings on the stock. On average, analysts estimate 111% upside to $6.50 in value from current levels.

9. OncoGenex Pharmaceuticals ( OGXI) is a biopharmaceutical company developing and commercializing cancer therapies that address treatment resistance problems in cancer patients. In its diverse oncology pipeline, each drug candidate has a distinct action mechanism, representing a unique opportunity for cancer drug development. The stock has gained 18.3% during the last one month.

For the first quarter of 2011, the company reported a loss of $3 million (31 cents per share) compared to $3 million (48 cents per share) in the year-ago quarter. Collaboration revenue stood at $1.2 million from $4.7 million in the first quarter of 2010. Collaboration revenue represents the expenditure incurred by OncoGenex for the Phase 3 development stage of custirsen, pursuant to its agreement with Teva, for the year ended Dec. 31, 2010. OncoGenex is entitled to receive full reimbursement from Teva relating to custirsen development. At March 31, 2011, a balance of $21 million of the upfront payment was recorded as deferred collaboration revenue.

As of March 31, 2011, the company had approximately $81.1 million in cash, cash equivalents and short-term investments compared to $85.1 million at the end of Dec. 2010. During the first quarter, the company purchased McAfee and Infineon's wireless division, paid $1 billion as dividend, purchased $2.7 billion in capital assets, and repurchased $4 billion in stock.

The company is currently enrolling a Phase 3 clinical trial referred to as the SYNERGY trial in approximately 123 cancer centers. Enrollment continues for Phase 3 Prostate Cancer SATURN trial to evaluate a durable pain palliation benefit for custirsen, in combination with docetaxel retreatment as second-line chemotherapy.

All the six analysts covering the stock recommend a buy. There are no sell ratings on the stock. On average, analysts estimate 101.9% upside to $37 in value from current levels.

8. Pacira Pharmaceuticals ( PCRX) is focused on the development, commercialization and manufacture of pharmaceutical products, based on its DepoFoam drug delivery technology, for use in hospitals and ambulatory surgery centers. The stock has gained 19% during the last one month.

For the first quarter of 2011, net loss came in at $9.8 million (98 cents per share) on revenue of $3.9 million, compared to $5.4 million ($9.39 per share) on revenue of $4.8 million in the year-ago quarter. At the end of March 2011, cash and cash equivalents were $59.3 million, up 127% from $26.1 million in the prior quarter.

During the quarter, Pacira entered into an agreement with Novo Nordisk, pursuant to which Pacira granted the latter license to develop, manufacture and commercialize formulations of a Novo Nordisk proprietary drug using its DepoFoam drug delivery technology. Pacira received an upfront license fee of $1.5 million and is entitled to receive up to $24 million in development-based milestone payments and an additional $20 million in sales-based milestone payments.

The company has reiterated its full-year revenue guidance at $14 to 16 million, excluding the impact of potential sales of EXPAREL, should it be approved by the FDA in the third quarter of 2011.

All the five analysts covering the stock recommend buying it. There are no sell ratings on the stock. On average, analysts estimate 23.8% upside to $16 in value from current levels.

7. Uroplasty ( UPI) is a medical device company engaged in the development, manufacture and marketing of products used for the treatment of voiding dysfunctions. Primary focus is on two products: the Urgent PC system and Macroplastique. The Urgent PC system is a U.S. FDA approved minimally invasive, office-based neuromodulation therapy for the treatment of urinary urgency, urinary frequency, and urge incontinence. The stock has gained 21% during the past one month.

Net revenue for the fourth quarter of 2011 was reported at $4 million compared to $3 million for the same quarter in 2010, reflecting 54% growth in U.S. sales following a 43% increase in Urgent PC Neuromodulation System sales to $1.3 million from the prior-year quarter. Lastly, there were 346 active Urgent PC customers in the fourth quarter. Net loss stood at $1.3 million (6 cents per share) compared to $0.6 million (4 cents per share) during the fourth quarter of 2010.

For full year 2011, sales increased 16.2% to $13.8 million from $11.9 million, while net loss widened to $4.6 million(25 cents per share) from $3.2 million (21 cents per share) in the earlier year. At the end of March 2011, cash and cash equivalents and short-term investments amounted to $14 million from $5.8 million at the end of the prior year.

All the three analysts covering the stock recommend a buy. There are no sell ratings on the stock. On average, analysts estimate 6.8% upside to $8.50 in value from current levels.

6. Cornerstone Therapeutics ( CRTX) is a specialty pharmaceutical company focused on acquiring, developing and commercializing products primarily for the respiratory and related markets. It operates in three segments: Prescription-branded Pharmaceuticals, Prescription-generic Pharmaceuticals, and Hospital Pharmaceuticals. The stock has gained 21.1% during the past one month.

During the first quarter of 2011, total revenue stood at $30 million, down 17.6% from $36.4 million in the year-ago quarter owing to lower revenue from the HYOMAX product family coupled with declining other product revenues. Net revenue from strategic products increased 20% year-over-year to $21 million vs. $17.5 million. Non-GAAP net income reduced to $4.5 million (17 cents per share) from $7.4 million (29 cents per share) in the first quarter of 2010.

Cash and cash equivalents at March 31, 2011 amounted to $86.1 million from $50.9 million as of Dec. 31, 2010.

Of the three analysts covering the stock, 67% recommend a buy and the remaining rate a hold. There are no sell ratings on the stock. On average, analysts estimate 36.5% upside to $10.50 in value from current levels.

5. Achillion Pharmaceuticals ( ACHN) is a biopharmaceutical company focused on the discovery, development and commercialization of therapies for infectious diseases. Within the anti-infective market, it focuses on the development of antivirals for the treatment of chronic hepatitis C and the development of antibacterials for the treatment of resistant bacterial infections. The stock has gained 23.6% during the last one month.

Net revenue for 2011 first quarter stood at $65,000 compared to $74,000 in the year-ago quarter. Revenue during both periods comprised of reimbursements under the company's collaboration with Gilead Sciences. Net loss widened to $10.1 million (17 cents per share) from $5.6 million (16 cents per share) in the comparable quarter of last year. Cash and cash equivalents and marketable securities stood at $46.4 million vs. $55.2 million in the prior quarter.

The company recently announced that it has started dosing in a Phase 1 clinical trial of ACH-2684, a pan-genotypic protease inhibitor being developed for the treatment of chronic hepatitis C virus (HCV). The trial consists of three segments including assessment of single ascending oral doses in healthy volunteers, a 14-day multiple ascending dose in healthy volunteers, and a 3-day evaluation of oral ascending repeat doses in subjects with either genotype 1, or genotype 3 hepatitis C infection.

Of the 11 analysts covering the stock, 82% recommend a buy and the remaining rate a hold. There are no sell ratings on the stock. On average, analysts estimate 53.8% upside to $10.80 in value from current levels.

4. Aveo Pharmaceuticals ( AVEO) is a biopharmaceutical company focused on discovering, developing and commercializing cancer therapeutics. Its drug candidates are directed against mechanisms recognized to be involved in cancer. The stock has gained 27% in the last one month.

Collaboration revenue for 2011 first quarter came in at $133.6 million from $10.9 million registered in the first quarter of the prior year. The company recorded $120.2 million relative selling price of the License Deliverable as collaboration revenue upon delivery of the license, and deferred approximately $4.8 million of revenue representing the relative selling price of the Royalty Territory Deliverable. Net income came in at $85.4 million ($2.38 per share) against a loss of $14.4 million ($2.27 per share) in the year-ago quarter.

As of March 2011, cash and cash equivalents stood at $101.1 million, up 120.7% sequentially. Current ratio increased to 4.40 from 3.46, while the debt-to-equity ratio declined to 0.13 from 0.25.

Going forward, the company has maintained its financial guidance and expects to close 2011 with at least $125 million in cash, cash equivalents and marketable securities, sufficient to fund its operations through 2012.

Of the six analysts covering the stock, 83% recommend a buy. On average, analysts estimate 36.9% upside to $26 in value from current levels.

3. BioSante Pharmaceuticals ( BPAX) is a specialty pharmaceutical company focused on developing products for female sexual health, menopause, contraception and male hypogonadism. The stock has gained 29.3% during the last one month.

Total revenue for 2011 first quarter plunged 98% to $57,000 from $2.3 million in the year-ago quarter, resulting from the recognition of $2.2 million in royalty revenue during the three months ended March 2010. This revenue increase is primarily from the receipt of non-refundable upfront payments from Azur in exchange for the elimination of all remaining future royalty payments. Cash and cash equivalents stood at $51.3 million, up 34.6% sequentially. Current ratio declined marginally to 4.15 from 4.96.

BioSante closed a registered direct offering in March 2011, bringing its March 31, 2011 cash balance to approximately $51.3 million. Management believes that this cash balance will be sufficient to finance operations and LibiGel clinical development well into 2012, without the need for additional funds.

Of the five analysts covering the stock, 80% recommend a buy and the remaining rate a hold. There are no sell ratings on the stock. On average, analysts estimate 83.3% upside to $5.50 in value from current levels.

2. Oncothyreon ( ONTY) is a clinical-stage biopharmaceutical company focused on the development of cancer therapeutics. The company's cancer vaccines are designed to stimulate the immune system to attack cancer cells, while its small molecule compounds are intended to inhibit the activity of specific cancer-related proteins. The stock has gained 38.9% during the last one month.

During the three months ended March 31, 2011, the company recognized $145,000 of previously deferred revenue relating to an agreement with Prima Biomed Limited as it has no performance obligations related to such agreement. Driven by higher research and development expenses, net loss widened to $7.1 million (24 cents per share) from $772,000 (3 cents per share) in the year-ago quarter.

As of March 2011, cash and cash equivalents nearly doubled to $11 million from $5.5 million at the end of the prior quarter. Moreover, current ratio declined to 10.03 from 16.16.

Going forward, 2011 expenses are expected higher than 2010, resulting from the advanced stage of clinical development of PX-866 and IND-enabling development activities for ONT-10. The company expects cash used in operations during 2011 at approximately $23 million. As a result, it estimates that its existing cash will be sufficient to fund operations for at least the next 12 months.

Of the five analysts covering the stock, 80% recommend a buy. On average, analysts estimate 34.2% upside to $8.33 in value from current levels.

1. Raptor Pharmaceuticals ( RPTP) is an early-stage development company. Its product portfolio includes both candidates from its drug targeting platforms and in-licensed and acquired product candidates. The stock has gained 80% during the past one month.

As the company is still in the development stage, it did not generate revenue since inception. During the first quarter ended Feb. 2011, net loss narrowed to $3 million (9 cents per share) from $4.2 million (19 cents per share) in the year-ago quarter. Cash and cash equivalents stood at $16.5 million vs. $16.9 million at the end of Aug. 2010. Furthermore, the company remains debt-free.

The company recently announced that clinical trial patients' visits were complete and final data analysis would begin this week (June 06, 2011) on the Phase 3 clinical trial of its delayed-release oral formulation of cysteamine bitartrate in patients with nephropathic cystinosis. The company announced that 41 patients have completed the nine-week study protocol for which it expects to report data by the end of July 2011.

Of the eight analysts covering the stock, 88% recommend a buy and the rest rate a hold. There are no sell ratings on the stock. On average, analysts estimate 54.4% upside to $9.20 in value from current levels.

>>To see these stocks in action, visit the 10 Health-Care Stocks Outperforming the Index portfolio on Stockpickr.

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