Astex Pharmaceuticals Inc. – NasdaqGS: ASTX
This is one of my favorites, and it has a big move in the past week. The recent sharp move upwards does lead one to holding back on jumping in here necessarily. This becomes one to grab on a pull-back only. However, let’s look at why this one is so strong. I am not going to put all of the latest headlines in, nor am I going to throw in a bunch of quotes from the latest 10-Q.
First the risks with ASTX: “Since inception, we have funded our research and development activities primarily from private placements and public offerings of our securities, milestone and other payments from collaborators, sales of our products, and royalty revenue on sales of Dacogen. As a result of our substantial research and development expenditures and minimal product revenues, we have incurred cumulative losses of $330.2 million through June 30, 2013, and have not consistently generated enough funds through our operations to support our business. Although we were profitable in the last three years, we expect to have operating losses over the next few years and we may never achieve sustained profitability.” These risks are further detailed in the 10-Q
Now the upside:
“RBC Capital reiterated an Outperform rating on Astex Pharmaceuticals (NASDAQ: ASTX) with a price target of $9.00. Comments follow topline results from the ongoing phase 2 of SGI-110 in patients with AML and MDS. Analyst Michael Yee continues to believe the drug is undervalued. In his opinion, the SGI-110 looks much more active than older Dacogen (Eisai).” From StreetInsider – Link at the end of this article in our sources section.