A Therapeutic Opportunity

Written by GSCR Staff   
Monday, 24 February 2014 23:06

In yesterday’s Goldman Guide we indicated that there were several indications of a slowdown in the market and that investment bankers will turn to an opportunistic mindset as the bull market loses steam.  One sector that is always available for opportunity for investors is small cap biotech.  Factor in the short term benefit that Obamacare may have for related medical stocks, and the right pick could be a big winner in 2014. TherapeuticsMD, Inc. (NYSE – TXMD - $6.20) fits the bill for a great opportunity. 

The Company offers a variety of women’s healthcare products that target all age demographics but is focused on older women.  TXMD produces and markets branded and generic vitamins as well as over-the-counter vitamins and cosmetics.  The company offers prenatal vitamins, vegan docosahexaenoic acid, iron supplements, Vitamin D supplements, natural menopause relief products, and scar tissue and cosmetic stretch mark creams under the vitaMedMD brand, as well as duplicate formulations of its prescription prenatal vitamins products under the BocaGreenMD Prena1 name.  The Company also conducts clinical trials for hormone therapy and pharmaceutical products that are designed to alleviate the symptoms of and reduce the health risks resulting from menopause-related hormone deficiencies, including hot flashes, osteoporosis, and vaginal dryness.

Currently, TherapeuticsMD has a clinical development focus on hormone therapy and pharmaceutical products that are targeted for older women who suffer from menopause-related hormone issues.  In January, the Company announced positive results for its vaginal preparation capsule TX 12-004-HR in a PK test versus Novo Nordisk’s (NYSE – NVO) Vagifem that may indicate superior therapeutic advantages.  Additionally, the Company initiated the SPRY Trial, a randomized, placebo-controlled phase 3 clinical trial designed to evaluate the safety and efficacy of TX 12-002-HR, its oral progesterone candidate for secondary amenorrhea, a condition treated to maintain fertility in young premenopausal women.  Finally, TherapeuticsMD received a patent for its lead product candidate TX 12-001-HR, the drug designed to treat menopausal symptoms by replacing the 17ß-estradiol and progesterone hormones that women's bodies stop producing as the result of menopause last month.

The market for the products that TherapeuticsMD is a growing one as it is tied to the aging population.  The hormone therapy market potential is approximately $4 billion.  Look for TXMD to continue to get pops when clinical trial updates are announced and the news is good.  Add in very bullish technical analysis in the Daily Moving average metric and we think this one has room to run to $8 by this summer.

Have a great day!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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