Aratana Therapeutics, Inc. (NASDAQ:PETX)

CAPS Rating: No stars

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Member Avatar TurbulentTime (< 20) Submitted: 9/11/2014 1:42:04 PM : Outperform Start Price: $11.45 PETX Score: -7.37

In the long run, PETX will see increasing revenue. For now, as of Sept 2014, it still doesn't have no real revenue yet as it is still in the process of getting drug approval.

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Member Avatar asilverp (37.01) Submitted: 8/29/2014 1:17:11 PM : Underperform Start Price: $11.61 PETX Score: +8.24

price is 550 times sales. Looks like a classic story stock to me. Everyone loves pets. How could you go wrong with a stock that markets to them? Probably worth < 1$.

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Member Avatar TMFCavalier (56.86) Submitted: 8/7/2014 3:17:37 PM : Outperform Start Price: $12.60 PETX Score: -17.14

Aratana is a therapeutics company in the companion pets (think dogs and cats) world. They focus mainly on acquiring the animal worldwide rights to drugs already in Phase I or Phase II development in humans. While I normally don't look too much into biotech stocks, I like this company for a couple of reasons:

1. People love their pets. As PETX points out, we've moved from the "Snoopy" generation of yesteryears to the "Brian" generation of today. Pets are more a part of the family than they've ever been. People are taking better and better care of their pets (aka spending more money on their pets), and as a consequence, the pets are living longer and exhibiting the same ailments that elderly humans do - arthritis, diabetes, heart disease, etc. Every year approx. $50B is spent on pets in the U.S. and nearly 70% of U.S. households have a pet.

2. Drugs for pets are far easier and cheaper to develop and get approved. As a pre-requisite for drugs to begin Phase I testing in humans, they must first pass a safety test where the drug is tested on two mammalian species. Typically cats/dogs are included as one of the species the drug is tested on. This means that when Aratana is looking at drugs to in-license, they already have an idea of the effectiveness and safety. Also, the standard for approval for pets is far lower than it is for humans and it generally only takes a drug 5 years of development versus 10 years for human drugs.

3. Sales are made directly to vets and owners pay vets directly for the drugs, meaning their is no insurance to go through. This keeps things simpler and gives vets a strong incentive to prescribe Aratana's drugs. Drug sales typically make up at least 10% of a vet's practice revenue. Right now a lot of vets will actually try and treat a pets aliments with human drugs, which does not give the pet the full effect as human biologics are similar, yet different, than cat/dog biologics. This means that a vet will be far more confident prescribing these drugs because they are both more effective and safer than what they are currently giving pets.

A couple of things I am worried about: bigger and better capitalized pharma companies becoming involved in the pet therapeutic market or not licensing their drugs to Aratana so they can keep the drug in-house. And although people love their pets, surely there is some price point at which they will balk and not pay for a pet's medication.

I think this is really a unique company with top-notch management taking advantage of a previously under-served market.

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Member Avatar TTime0917 (< 20) Submitted: 7/23/2014 6:48:41 PM : Underperform Start Price: $12.59 PETX Score: +16.03

I think this one will flatten at $12

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