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XMFHelical (< 20)

BASI - not rateable - for now



August 31, 2007 – Comments (3)

In the theme of my love biotechnology support companies, I'd like to comment on a promising microcap.  Too little for CAPS today, but perhaps I can rate this sometime.

BioAnalytical Systems (Nasdaq: BASI)

Bioanalytical Systems, Inc., through its subsidiaries, provides contract development services and research equipment to pharmaceutical, medical research, and biotechnology companies and institutions worldwide.

More here: 

Market cap of only 33.4M (and add another 11M debt to the EV). 

Effectively they are a smaller competitor of companies like CRL. 

At first glance the financials are relatively blah.  Sales are steady, but not growing too rapidly.  Margins may have been getting a bit squeezed.

So what's to like - well the company, and by that I mean the people, and by that I mean - I'm a satisfied customer.  As still a bit of a neophyte to the drug development world, this group was among the most professional, courteous, and helpful CROs I have worked with.  I was not a primary contact on most of the programs, but was involved with all our contracts with them, and I really don't have a bad thing to say about them.

Word of mouth means a lot in this industry - and I have a hard time imagining that this company won't benefit from that down the road.  Also, while they may look pricey on a P/E ratio, having just been profitable recently on a TTM basis, they currently sell at only 1X sales, and no major customer accounts for more than 10% of the business (Pfizer 2006 - 7.3% from 10k).  BASI must be on someones radar as a potential acquisition.

Small caps are risky and micocaps even more so!   Small companies can get killed by things as minor as a key employee departure.  But I like the odds on these guys. 

I don't own BASI, and don't normally play out my investing line invest into this risk well, but perhaps I'll take a flyer on this one sometime.



3 Comments – Post Your Own

#1) On September 01, 2007 at 1:39 AM, TMFSarahGen (96.74) wrote:

I'm glad you mentioned your blog in HG land.  You linked to this one post.  But I'm really trying to learn all I can about different biotechs - and what a treasure trove your blog is!  Do you have 1, 2 or 3 favorites right now?  I'll be busy reading your blog and checking out your pitches.  Just thought I'd ask. Thanks!  Sarah

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#2) On September 01, 2007 at 9:18 AM, XMFHelical (< 20) wrote:

Thanks Sarah(Genetics?).


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#3) On September 01, 2007 at 4:54 PM, TMFSarahGen (96.74) wrote:

you're the first to ever ask.  I think most people think my middle name is Gennifer.  The truth is a little embarrassing.  I'll email you. :-)  Now how about those "favorite biotech" picks?!

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