I warned you that it was going to be a “volatile first-quarter earnings season.” And that is exactly what the market experienced so far. That said, our best defense is to be diversified. Putting all of you capital in just a handful of positions increases your risk, particularly in this environment.
Additionally, investors should stay abreast of their holdings making news headlines. Biotech is a good place to look for opportunity and always has developments to keep up with.
In particular, Depomed Inc (NASDAQ:DEPO), Horizon Pharma PLC (NASDAQ:HZNP) and Inogen Inc (NASDAQ:INGN) have made announcements recently that investors should be aware of.
Let’s take a look at the latest from these stocks to buy:
3 Biotech Stocks to Buy: Depomed Inc (NASDAQ:DEPO)
Depomed Inc (NASDAQ:DEPO) announced in April that it had settled its patent infringement litigation with Actavis plc (NYSE:ACT).
Actavis had submitted an Abbreviated New Drug Application for approval of generic versions of Gralise 300 mg and 600 mg tablets. Under the settlement agreement, Actavis may begin selling generic versions of Depomed’s Gralise in January 2024.
Depomed management was “pleased” with the settlement, as it provides an “expected period of exclusivity for Gralise” and allows DEPO to avoid an expensive appeal. If you recall, Gralise is the only approved once-a-day treatment for patients with after-shingles pain, and last year, Gralise sales were $60.4 million.
DEPO remains a good “buy.”
3 Biotech Stocks to Buy: Horizon Pharma PLC (NASDAQ:HZNP)
Our Irish biopharmaceutical company, Horizon Pharma PLC (NASDAQ:HZNP) announced last weekend that its experimental Friedreich’s ataxia treatment, Actimmune, received fast-track designation from the U.S. FDA. Just as a reminder, fast-track designation can speed up an FDA approval.
Friedreich’s ataxia is an inherited disease that damages the nervous system, and right now, there are no FDA-approved treatments for the disease. Horizon Pharma submitted its new drug investigation application back in February, and HZNP plans to start a Phase III study this quarter.
This morning, Horizon Pharma reported that it received a Notice of Allowance from the United States Patent and Trademark office for its Diclofenac Topical Formulation, which covers Horizon Pharma’s Pennsaid 2%. HZNP will now receive a U.S. patent once administrative processes are done, and it marks the eighth U.S. patent for Pennsaid 2%.
Horizon Pharma also announced a public offering of 15.35 million shares, priced at $28.25 per share. Underwriters have the option to purchase an additional 2.3 million shares. Proceeds from the offering are expected to be about $413.1 million.
HZNP shares, of course, initially pulled back on the announcement, but let me assure you there is no cause for concern. HZNP stock already recovered from this slight pullback, and I look for Horizon Pharma to continue to push higher as strong earnings and sales will continue to support the stock.
HZNP will announce first-quarter results on Friday, May 8. Analysts are looking for earnings of 2 cents per share on $103.07 million in sales, which translates to 54% annual earnings growth and 98.5% annual sales growth.
Plus, estimates have been revised 11% higher in the past two months, which means another earnings surprise may be in the offing. Continue to buy HZNP.
3 Biotech Stocks to Buy: Inogen Inc (NASDAQ:INGN)
Due to its ongoing internal investigation, Inogen Inc (NASDAQ:INGN) announced this week that it would delay filing its Annual Report on Form 10-K for 2014.
If you recall, Inogen revealed that certain representatives violated company policies and an Audit Committee was formed to investigate. Inogen also delayed the release of its fourth-quarter financial results because of the investigation.
Once the investigation is completed, Inogen plans to evaluate if any adjustments need to be made to financial statements and will then report fourth-quarter and full year 2014 results. INGN management still expects to meet or exceed previous 2014 guidance and has reaffirmed its revenue and earnings guidance for 2015.
So, I continue to recommend that we wait until earnings are released before taking any action. For now, INGN remains a buy.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
