Maxygen, Inc. (NASDAQ:MAXY)

zzlangerhans (99.67) Submitted: 1/13/2012 11:59:36 AM : Start Price: $5.48 MAXY Score: +3.91

Maxygen is a rather puzzling company that seems to be operating more as a savings account than a developmental biotech. For the last year the company has engaged in minimal activity related to research or their products in development, which has been reflected in their minimal expenditures. The only pipeline development since last March was a fruitless attempt at a BARDA contract for G-CSF analogue Maxy-G34 for radiation sickness.What Maxygen seems to be most interested in right now is hoarding cash, with the exception of buying back their own shares. It's a shame, really, since the company has done well with their developmental efforts. In 2008 the company sold their early stage developmental hemophilia treatment Maxy-VII to Bayer for 90M, and in early 2011 Astellas exercised an option to purchase the Perseid joint venture for 76M.The pipeline sales have left Maxygen with Maxy-G34 and 163M in cash, and a market cap below cash at 155M. The company doesn't seem to have much plans to develop Maxy-G34 on their own, but the drug does have potential for partnering. In addition, the company remains eligible for a 30M milestone payment from Bayer related to Maxy-VII, although I am unsure of the trigger.The bottom line is that I have nothing to indicate a short-term rise in Maxygen. The share price simply drifted below the 5.5 threshold I recently established to generate a CAPS pick. A Maxy-G34 partnership or Maxy-VII milestone payment would drive the share price north of 6.5, and the substantial cash position buffers the stock against broad market declines.