Repligen Corp.: All you need is cash
Repligen Corp. (Nasdaq: RGEN)
Waltham, MA
http://www.repligen.com
52-week low / high: $2.64/$5.03
Shares Outstanding: 30.62 million
Market Capitalization: $132.89 million
If cash is king, Repligen Corp. (Nasdaq: RGEN) is royalty. As of Sept. 30 the biopharmaceutical company’s coffers comprised $62.7 million in cash and cash equivalents, up from $22.7 million on March 31, 2007.
The small cap, which develops therapeutics for the treatment of central nervous system diseases, swung to a profit in its second fiscal quarter of 2008, ended Sept. 30. Net income for the three months was a whopping $40.3 million, or $1.29 per share, compared with a net loss of $0.86 million, or $0.03 per share, for the second quarter of 2007.
Granted, the company got a little help this quarter when it clocked a gain of $40.2 million on account of a lawsuit settlement with ImClone Systems. Repligen, along with the Massacheusettes Institute of Technology (MIT) sued Imclone in 2004 for patent infringement against ImClone regarding the manufacture and sale of Erbitux. The patent is assigned to MIT and exclusively licensed to Repligen.
But minus the one-time gain from the lawsuit settlement, the company is still on track, as it would have broken even at the bottom-line.
Total revenue surged a healthy 87% in the quarter to $5.35 million, compared with $2.87 million for the second quarter of fiscal year 2007, driven by the company’s Protein A product, which is used in the production of monoclonal antibodies (proteins found in blood or other bodily fluids used by the immune system to identify and mitigate bacteria and viruses).
For the past four quarters, Repligen has blown away analysts’ expectations consistently; surprising by 13,200% in its most recent quarter and by 133% on average for the prior three quarters.
Cash flow from operations has been positive for the past two years. The company has incrementally increased its cash position on the balance sheet over the last three years and substantially bolstered its position in its most recent quarter.
Repligen’s cushy cash position should allow the company to invest in its CTLA4 intellectual property, Protein A business and product pipeline without the financial risks normally associated with a clinical stage biotechnology company.
With litigation in the rear view mirror, cash in its coffers and promising product lines that are already starting to materialize, this little biopharmaceutical company is poised for take off.
Note: Repligen Corp. (Nasdaq: RGEN) is on the “Watch List” of Rising Star Stocks, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Repligen displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Rising Star Stocks portfolio at a later date.
