"Jim Cramer had the CEO of up and comer biotech company Seattle Genetics on his show this week. So I thought I would take a look at some healthcare stocks this week for investment"

Dow Jones Industrial Average 12,554.20 (UP nicely) Week ending 06-08-2012

Jim Cramer - Friend of the retail investor

Nobody outworks Jim Cramer to bring you great investment ideas from Wall Street. I do a blog once a week and it takes me 3 to 4 hours. Louis Rukeyser did a half hour show once a week.

Jimmy, brings the goods to you,  5 days a week, for 1 full hour each day. That is an unimaginable task. The amount of work to not only research and write the material,  but also present that amount of data and ideas is absolutely daunting. An incredible job, well done by this young man and his crew at Mad Money! Keep the good ideas coming and everyone diversified in their investments. 


This week the "Boooyah" kid brought us Seattle Genetics Inc. (Symbol SGEN, $23.52) company with negative earnings but very rapidly growing revenues which will bring the company rapidly to positive earnings. This set me off on a tangent to look for some other ideas for investments in this sector.


This is what I found that I like in various categories:


Aggressive Growth: 

Alexion Pharmaceuticals Inc. (Symbol ALXN, $92.43) 


Questcor Pharmaceuticals Inc. (Symbol QCOR, $43.94)





Good Solid "Meat and Potatoes " Growth Companies:


Celgene Corp. (Symbol CELG, $65.04) 
Zimmer Holdings Inc. (Symbol ZMH, $60.96) 

Local pharma company with good fundamentals but a bunch of Class Action litigation trouble.!

ViroPharma Inc. (Symbol VPHM, $20.32) - pretty good company. Presents a speculative value play here. 




Speculative - some high risk names with no earnings currently, but held by some well known mutual funds. Risky investments.

MandKind Inc. (Symbol MNKD, $1.76)  


Auxilium Pharmaceuticals (Symbol AUXL, $21.57)

Of all these stocks, I like QuestCor Pharmaceuticals the best.


Have a pleasant Sunday. A shout out to horse "Union Rags" for winning the Belmont Horse Racing Stakes.


Freewilly

Who is printing money? A look at the balance sheet of biotechnology company ....... Celgene

Dow Jones 10,850.36 (UP) week ending 03-26-2010

Biotechnology companies have a similar cost structure to oil companies that drill oil wells. Oil companies make large capital investments in drilling equipment and they often hit dry wells. But sometimes, occasionally, they hit a gusher. Biotechnology companies have a similar investment scenario. They spend a sizable amount of capital investment up front for research and development and Phase One, Two and Three testing for the viability of a new medicine. Many times these ventures are partial or total failures. However, they go through this exercise in the hopes of developing that one big blockbuster drug. When that happens it can mean years of solid revenue stream and company growth with lots of dollars falling right down to the balance sheet bottom-line.

In the case of Celgene (Symbol CELG, $62.43) that gusher and blockbuster goes by the name of Revlimid. According to Celgene's website,"REVLIMID® (lenalidomide) in combination with dexamethasone can slow the progression of multiple myeloma. REVLIMID® is an oral medication that can stop or slow the growth of cancerous myeloma cells within the bone marrow."
Celgene did 2.69 billion in sales in 2009 powered by the blockbuster REVLIMID at an unbelievable gross margin of 93.55%. Now that is printing money! Net margins run at 28.88%. The quarterly balance sheet shows a quick ratio of assets to liabilities as being 7.7 to 1. Celgene has no long term debt. The stock is only up 13.78% year to date, so it really hasn't taken off yet this year. You can still get in and buy the stock here. I tried to investigate the patent situation on the drug REVLIMID® and it appears to have 12 patents which range from expiring the end of 2010 all the way out to 2026. So further homework should be done in this area to discern the implications to sales revenue, because I am certainly a novice on this subject. The PE on the stock is currently 27.4. However, the 5 year revenue growth rate for Celgene has been running at 51.63%. So it is fairly common for a stock to have a higher PE that is growing at that fast a rate with those high profit margins. I don't know the impact of what Celgene's competitors may be offering to patients to compete against this drug, so I cannot factor that into the value of the price of the stock.


So Celgene could add a nice growth component to your portfolio. It does not offer a dividend, but instead puts that money back into R&D for future products. (This is good thinking to sustain the rapid growth.)

Hope you have good spring weather for gardening which is my other hobby.

Please feel free to leave comments on this blog about other stocks that print money! This is just my opinion and one idea offered on the subject. There are lots of others.

Freewilly