This week’s Stock of the Week is about to launch a unique drug and has another in the pipeline.
Portola Pharmaceuticals, Inc. (PTLA) is a drug-development company with one US-approved product, a second expected to gain approval soon, and collaboration agreements with Bristol-Myers Squibb and Pfizer.
Like other drug-development companies, it goes through money quickly as it develops and tests drugs and brings them to market—it should show its first profit in 2019. What makes Portola especially attractive is Bevyxxa, which is being launched in the US early this year and in Europe later in the year. This is the only approved oral blood thinner for acutely ill patients who are at risk for blood clots that can break loose and cause heart attack or stroke. If it is approved, Portola’s second product, AndexXa, would be the only “universal” reversal agent for patients who are on anticoagulant drugs and experience serious or life-threatening bleeding or need urgent or emergency surgery.
Portola had $500 million in cash at the end of December but will use half that for operations this year and for now will continue to have revenue only from partner payments for reaching milestones regarding FDA approvals and sales. Revenue was $35.5 million in 2016. For 2017, it will likely be reported as $16 million. Then it is likely to grow to $230 million this year and $540 million next year as drug sales mount sharply.
Fiscal year: December. Earnings per share: 2019 est./$0.75…2018 est./–$2.80…2017 est./–$4.90…2016/–$4.28.
Tom Plumb is president and chief investment officer of Plumb Funds, Madison, Wisconsin, including the $44 million Plumb Balanced Fund (PLBBX) and $30 million Plumb Equity Fund (PLBEX). PlumbFunds.com