Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



3 Things to Watch With Astex Pharmaceuticals

Astex Pharmaceuticals (Nasdaq: ASTX  ) is a biotechnology firm focused on therapies in the fields of oncology and hematology and small-molecule-drug discovery. It currently has one drug approved by the Food and Drug Administration (FDA) and a pipeline filled with 10 clinical phase experimental drugs and multiple pre-clinical trials.

Today, let's look at three things investors should be watching regarding Astex Pharmaceuticals, which will provide us with better insight into the company.

1. Clinical-phase pipeline
Astex currently has one FDA-approved drug on the market, Dacogen, for the treatment of myelodysplastic syndrome. It markets this drug in cooperation with Eisai Pharmaceuticals in North America and Janssen Cilag, a subsidiary of Johnson & Johnson (NYSE: JNJ  ) , everywhere else. Dacogen's sales have hit a stagnant point in recent quarters making it extremely important that Astex continues to develop its pipeline of drug hopefuls in order to grow its bottom line.

With four drugs in phase 1 trials, five hopefuls in phase 2, and an expansion of Dacogen in phase 3 trials, Astex offers shareholders a seemingly endless parade of study data with plenty more in the pre-clinical and discovery stages. The basis for Astex's success in discovering potential therapies lies in its proprietary fragment-based drug discovery platform known as Pyramid. This technology is able to computationally determine how low-weight molecules (fragments) and proteins will interact with one another, and has allowed Astex to create a bountiful clinical-phase pipeline.

2. Partnerships
In addition to discovering potentially new therapies, a small biotechnology company having a partner with an experienced sales and marketing team, and deep pockets, is often appreciated. Astex has worked rigorously to set itself up for success by partnering with many large pharmaceutical names.

In addition to partnering with Eisai and Janssen Cilag on marketing Dacogen, Astex has collaborative clinical-phase agreements with Novartis (NYSE: NVS  ) for AT7519, a treatment for leukemia and LEE011, an enzyme inhibitor; AstraZeneca (NYSE: AZN  ) for AZD5363, an orally active, selective protein kinase B inhibitor, and AZD3293, a potential Alzheimer's treatment; and GlaxoSmithKline (NYSE: GSK  ) regarding therapies of Glaxo's choosing with the assistance of Astex Pyramid platform.

These partnerships provide milestone payments, and in some cases cost-sharing initiatives, which allow Astex to carry on multiple trials at the same time.

3. Cash
Finally, with Astex spending so much on researching and developing its now-extensive pipeline, it's imperative that you keep a close eye on its usage of cash.

Astex, thus far, has done a pretty good job of putting itself in position to receive milestone payments from its partners and spend within its means. As of its latest quarter Astex had $122.5 million in cash with no debt. Forming partnerships and Dacogen's approval have made Astex profitable and cash flow positive since 2009. Astex shareholders shouldn't have too much to worry about in terms of cash burn.

Foolish roundup
Now that you know what to watch for, it should be easier to analyze Astex Pharmaceuticals' successes and pitfalls in the future, and hopefully you'll gain a competitive investing edge.

If you're still craving even more info on Astex Pharmaceuticals, I would recommend adding the stock to your free and personalized Watchlist so you can keep up on all of the latest news with the company.

One key to Astex success is its proprietary technology. This is exactly why our team of analysts at Motley Fool Stock Advisor scoured the market for disruptive technologies and found three companies that appear set to lead the next industrial revolution in technology. Click here to get your free copy of this latest special report and find out the identity of these three companies.

Fool contributor Sean Williams has no material interest in any of the companies mentioned in this article. You can follow him on Motley Fool CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of, and creating a diagonal call position in, Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that has transparency written into its DNA.

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 27, 2012, at 2:20 PM, MaxSanderson wrote:

    You fail to mention in this article that Astex recently received "a positive opinion, recommending the granting of a marketing authorisation for the medicinal product Dacogen, 50 mg, powder for concentrate for solution for infusion, intended for the treatment of acute myeloid leukaemia" (an indication that failed FDA muster); a likely approval by the EMA by the end of the year.

    This is very positive, as it will yield important "Phase IV" date for a future FDA decision to approve Dacogen for AML for the US market.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1955728, ~/Articles/ArticleHandler.aspx, 10/25/2016 8:13:56 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 10 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
ASTX.DL $0.00 Down +0.00 +0.00%
Astex Pharmaceutic… CAPS Rating: ***
AZN $30.08 Down -0.64 -2.08%
AstraZeneca CAPS Rating: ****
GSK $40.68 Down -0.45 -1.09%
GlaxoSmithKline CAPS Rating: ***
JNJ $113.61 Up +0.17 +0.15%
Johnson and Johnso… CAPS Rating: ****
NVS $75.45 Down -0.09 -0.12%
Novartis CAPS Rating: ****