Where Opportunity is Found - Research Report on Jazz Pharmaceuticals plc and Spectrum Pharmaceuticals, Inc.
As industry marked by roller coaster ups and downs, where does opportunity lie ahead? Which companies have what it takes to survive regulatory approval and oversight?
NEW YORK, January 23, 2013 /PRNewswire/ --
Biopharmaceutical companies Jazz Pharmaceuticals plc (NASDAQ: JAZZ) [Full Research Report][1] and Spectrum Pharmaceuticals, Inc., (NASDAQ: SPPI) [Free Research Report][2] have contrasting histories, but have the same positive outlook for 2013. One has a history of massive returns in a short period of time, making it one of the best investments in the market's most volatile industry; and the other one had a rough 2012, but is expected to bounce back and improve this year.
Jazz Pharmaceuticals is included in the expected great biotech stocks for 2013. The company's consensus price target is $69.18. If the target is right, this implies almost 32 percent upside in 2013. What makes Jazz stand out is its outperform rating and the expected sales gain of over 100 percent in 2012 is expected to show a 37 percent gain to $809 million in 2013. With earnings expected to grow from about $4.73 per share in 2012 to $5.67 this year, shares of Jazz Pharmaceuticals trade at less than 10 times the expected 2013 earnings.
Spectrum Pharmaceuticals, on the other hand, did not do well last year but could see its fortunes change in the coming years. Solid results were reported for its colorectal cancer drug, Fusilev. The announcement of its special dividend allowed analysts and investors to see it sporting an attractive valuation. Other good news for Spectrum Pharmaceuticals is that its CEO recently announced that revenue for 2012 will be over $300 million, which suggests strong Q4 sales, expecting growth in 2013. With a forward P/E ratio of 8.08 and a price/sales under 3.0, Spectrum Pharmaceuticals can be considered as a great long term investment.
The driving force behind the emerging biotech stocks is mergers and acquisitions (M&A). M&A helps most biotech firms to fund research and development (R&D) in order to discover and develop new and more advanced generations of drugs. With a market cap of $3.27 billion, Jazz Pharmaceuticals fits the M&A bill. For Spectrum Pharmaceuticals, as a small cap company, it is critical for it to form partnerships with bigger companies to increase R&D investments.
As a necessity, demand for drugs will always be high. Biotechnology is one of the most volatile and unpredictable industries, with a high-risk, high-reward scenario. Substantial gains have been seen in 2012, and 2013 seems more promising for the industry.
Reference Links:
[1] The Full Research Report on Jazz Pharmaceuticals plc - including full detailed breakdown, analyst ratings and price targets - is available to download free of charge at: [http://www.nationaltradersassociation.org/r/entire_report/e495_JAZZ]
[2] The Free Research Report on Spectrum Pharmaceuticals, Inc. - including full detailed breakdown, analyst ratings and price targets - is available to download free of charge at: [http://www.nationaltradersassociation.org/r/entire_report/3dad_SPPI]
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SOURCE National Traders Association
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