Cadence Pharmaceuticals (CADX)
From Cabot Wealth Advisory 1/27/14 Sign up for Cabot Wealth Advisory
Cadence Pharmaceutical’s (CADX) only previous appearance in a Cabot advisory was in December 2011, when it was one of the 10 stocks featured in Cabot’s Ten Best Low-Priced Stocks for 2012. At the time, it was trading for less than 4 a share. One month later, it was up 20% and six months later it was up 76%.
So that worked out pretty well.
Today CADX is trading above 11, so it’s just climbing into the territory that makes it a candidate for our “regular” Cabot advisories. This is also the territory where institutional investors are likely to support the stock, if they see a story they like.
And I think they do, because Cadence’s story is about a mass market most people can identify with.
Specifically, Cadence has a drug called OFIRMEV that’s an intravenous form of acetaminophen. Acetaminophen, of course, is well proven as a pain reliever, and the advantage of this form is that it can be administered in controlled doses intravenously, by hospitals. Additionally, it can be combined with opioids to treat more severe pain, in the end reducing the usage of opioids.
The big reason for reducing opioid use is to reduce the risk of addiction and the consequensces that it often leads to.
Since OFIRMEV was launched in January 2011, it’s been used to treat more then two million patients. It’s distributed by all the big drug providers. And usage is growing.
Cadence has been a money-losing company until now, but it’s right on the verge of profitability—another factor institutions value highly.
Fourth-quarter results (pre-announced) saw revenues of $33.3 million, bringing 2013 revenues to $110.5 million. The loss in the fourth quarter may have been a few pennies. But for 2014, analysts are projecting a profit of $0.09 per share!
The combination of story plus chart tells me CADX has great potential, and I’ll definitely be watching this one.
But getting into the stock at the right place—especially for low-priced pharmaceutical stocks—can be tricky. And if you choose to bite on CADX, I’m afraid you’re on your own, for now. But I hope some Cabot advisory covers it in the future.
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|Cadence Pharmaceuticals (CADX)
12481 High Bluff Drive, Suite 200
San Diego, California 92130
Index Membership: N/A
Full Time Employees: 211