A Fountain of Youth?

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It's been quite the year for the biopharmaceutical company Sirtris Pharmaceuticals (Nasdaq: SIRT). The company went public in May, and its shares surged 14% on Friday upon its discovery of the fountain of youth. Well, it might not exactly be the fountain of youth, but the company's joint study with Harvard University would have made Ponce de Leon proud nonetheless.

The study, which was published in the scientific journal Cell, revealed a new mechanism to slow aging. The study found that by increasing the levels of the molecule NAD+ in the cells of rodents, those cells became more resistant to DNA damage. That resistance required sirtuin proteins, a target that Sirtris has been using for drug development to treat diseases of aging; thus, the connection to the paper and the jump in stock price.

For Fools interested in adding some zing to their portfolio in the form of a small-cap biopharmaceutical, Sirtris presents an alluring opportunity. Just last month, the company initiated phase 2 clinical studies for a product aimed at combating Type 2 diabetes. Given the unmet need in this area, the diabetes field has also recently become the R&D focus of many of the large-cap pharmaceutical companies such as Bristol-Myers Squibb (NYSE: BMY), Merck (NYSE: MRK), and Eli Lilly (NYSE: LLY).

Sirtris expects to end the year with about $115 million in cash and short-term investments. This amount is more than ample to absorb net losses comparable to its Q2 loss of $6.6 million for some time to come. Its diabetes progress, coupled with this anti-aging study, should hammer home the notion that this small-cap stock is anything but a flier.