Close

Thatsonlyhalfthestory。

Thecompanyalsohasanenviableportfoliooftreatmentsalreadygeneratingprofits。

Forexample,itsflagshipvaricoseveinproduct(Variquel)hasbeenapprovedacrossEuropeandshoulddeliversubstantialgrowth。

ISPharmaalsosellsAloxi,whichcombatsacutenauseaincancerpatients,acathetermaintenanceproductcalledOptiflo,andCryogesic,aleadinganaestheticfreezespray。

Whatsmore,thefirmrecentlystruckadealtoin-licenseEpisil,anoralspraythatcreatesaprotectivefilmoverdamagedmouthsurfaces,andAequasyal,whichisusedtotreatcancerpatientswhodevelopdry-mouthproblemsduringchemotherapy。

Theseproductsarestartingtodeliverseriousbucksaswell。

Lastweekthegroupsaiditsresultswouldbesignificantlyaboveexpectations,sendingthestock19%higherontheday。

HousebrokerPiperJaffrayexpects2009/2010salesandadjustedearningspershareof£14。

5mand6。

82prespectively,risingto£18。

1mand9。

92pin2010/2011。

Soat74peach,theshareslookastealforsuchascience-richfirmpossessingdefendablepositionsinnichemarkets。

Ittradesoncheapp/eratiosofonly10。

8and7。

5forthenexttwoyears,andissupportedbynetfundsof£1m。

Sowhatarethepotentialbananaskins?

Thefirmisarelativeminnowinagiganticpond。

Itisaimingtobuynewtreatments,andalsohas£5。

5mofearnoutpaymentsstilltosettlefrompastacquisitions,sotheresachancethecompanywillhavetoraisefreshcapital。

ItsrelianceontheNHSisalsoaconcern,althoughamuchhigherproportionoffuturerevenueswillbederivedfromEurope。

PiperJaffrayhasa105ppricetargetonthestock,andpreliminaryresultsaredueouton2June。

Recommendation:speculativeBUYat74p(marketcapitalisation£23m)



PaulHillalsowritesaweeklyshare-tippingnewsletter,PrecisionGuidedInvestments

NakedTextNakedText