A biopharmaceutical company dedicated to the development and commercialization of therapeutics to treat patients with cancer and adjacent diseases.
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As I have said numerous times in the past, biotech definitely is not my area of expertise. Having said that, the complexity of biotechs and their propensity to wind themselves down more often that companies in other sectors seems to often lead to interesting investment opportunities in the sector.
I added Enzon Pharma (ENZN) to my CAPS portfolio at $11.01/share. The company currently has a whopping $6.50/share in cash.
It also is receiving royalty payments from Merck for its Hep C drug Pegintron. One can debate the current value of that cash flow, but I have seen estimates out there of around $3.50/share.
ENZN is also receiving royalty payments from UCB Pharma for its arthritis drug Cimzia. Again, I have seen a current value of around $1.50/share estimated for this asset.
These three things alone are equal to $11.50/share, slightly above ENZN's current share price. Everything else that the company has is essentially being given away for free, including a number of drugs that are in testing. As an added bonus the Board of Directors has new members who seem intent on increasing the value of the stock and the company announced a share buyback.
I am not comfortable enough to purchase many, if any biotechs in real life. Cash cushions are fantastic, but companies in this sector tend to burn cash...often at a rapid pace. This company is cheap enough that I am adding it to my CAPS portfolio.
Deej