With a stock price below $3 per share and a market cap of around only $230 million, you might reasonably conclude that Antares Pharma
One reason that investors like Antares is because it develops drug-delivery systems that can be used for many different drugs. These include self-injection devices and topical gels. Its technology can be licensed by many other drug-makers, generating increasing income through royalties. Already, Pfizer
The beauty of that kind of business model is that Antares doesn't have to be spending money marketing those treatments. That's typically up to its partners, though Antares reaps benefits from it as sales grow. And in general, the health-care field is a very promising one, as our global and domestic population grows and gets older, requiring more medications, procedures, and devices.
Meanwhile, Antares has a number of products either through trials like ELESTRIN for menopause (partnered with Jazz) and ANTUROL for overactive bladders, or in development like NestraGel for contraception. Also in development is Vibex MTX, which delivers methotrexate, a treatment for rheumatoid arthritis and other autoimmune diseases. With Teva, it's working on an alternative to the commonly used EpiPen epinephrine auto-injector. These are all promising areas, and just one or two big successes can make a huge difference for the company.
A final reason to buy is the price. Antares stock recently plunged 33% on less-than-unequivocally-good results for BioSante Pharmaceuticals'
Reasons you might sell (or choose not to buy) Antares include the fact that it's a penny stock -- a stock selling for less than $5 per share. Yes, some pennies do grow and reward investors. But many are tied to shaky enterprises, with their relatively few shares easily manipulated by hypesters pumping and dumping the stock. As with any penny stock, proceed with caution.
You might also avoid Antares if you don't know much about biotechnology. In all investing, it's best to have a good handle on how a company operates and makes its money, and also on its competitive landscape. For most of us, who aren't scientists, this can be tough with such companies.
Meanwhile, although Antares is seeing its revenue grow briskly, that still hasn't translated into profits. It can be safer to stick with companies that are already profitable.
So should you buy or cross the company off your list? Consider just holding, or waiting, instead. Biotech companies tend to rise or fall according to binary events on the pathway to product approval. In time, Antares may have some more successful treatments under its roof, or additional lucrative partnerships for its drug-delivery systems.
I'm not rushing out to buy shares of Antares, but I'm going to keep an eye on it, and think some more about it. You might want to do the same. It's not for the risk-averse, though -- there are plenty of solid, profitable dividend payers for those folks, and ones that are growing briskly, too.
Longtime Fool contributor Selena Maranjian owns shares of Teva Pharmaceutical, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of Teva Pharmaceutical. Motley Fool newsletter services have recommended buying shares of Pfizer and Teva Pharmaceutical. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.