Biotech Wednesday

Written by GSCR Staff   
Wednesday, 05 December 2012 09:45

Good Morning!  After a steady decline to a rock bottom of $2.09 in the fall of 2011, Albany Molecular Research (NASD – AMRI), reached a 52 week-high of $5.14 as the bio-tech sector ended the day yesterday up slightly.

Albany Molecular Research offers a wide variety of services from drug discovery and development to manufacturing.  Additionally, the Company has several initial phases of pipeline products for which they are seeking partnership, including cancer treatments to obesity reduction products.

Since the stock bottomed in August of 2011, the Company has entered into several agreements made key management changes, and restructured where appropriate measures where necessary.  AMRI reported excellent 3Q12 results highlighted by an 11% increase in revenue from the third quarter of 2011, an increase in the number of revenue streams including a 45% increase in royalty earnings from the third quarter of 2011, and an increase on guidance from royalty and EPS earnings for 2012.

With all the factors listed above, we see the stock going to the $6.00 mark in the near term.

Cornerstone Therapeutics Inc. (NASDAQ – CRTX - $5.15) is a niche pharmaceutical drug company specializing in hospital, respiratory, and other specialty drug markets.  The company just had a slam dunk for third quarter earnings with an increase of 49% on revenues and 66% increase on net income from the third quarter 2011.  A major part of this story is the completion of the integration of the EKR Therapeutic acquisition ahead of schedule bringing in $8 million in synergies.

The stock hit a 52-week high of $7.70 on July 31, and had a steady decline with some bad news on a new heart drug, lixivaptan, with a negative opinion from the FDA on September 14.  The stock took a subsequent plunge to $5.06.  We believe that all of the ‘bad news’ is already reflected in the stock price and that will not impact the valuation of the current successful and profitable business lines. We look for the stock to reach $7.00.

Happy trading!

Aaron Schweitzer

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