There are one-hit wonders, and then there are those stocks for which the initial big move is only a preview for even bigger and better gains to come.
Shares of biotech Repros Therapeutics (Nasdaq: RPRX) surged 62% over the past week, far surpassing the 2.9% gain by the broad market index. With its treatment for hypogonadism moving into late-stage trials, it's time for investors to begin thinking about its potential as a market mover in the space.
Repros Therapeutics snapshot
| Market Cap | $229 million |
| Revenues (TTM) | $0 |
| 1-Year Stock Return | 211.9% |
| Return on Investment | (119.1%) |
| Estimated 5-Year EPS Growth | N/A |
| Dividend & Yield | N/A, N/A |
| Recent Price | $15.41 |
| CAPS Rating (out of 5) | * |
Source: FinViz.com. TTM = trailing 12 months.
A mighty temblor
Testosterone is what makes men men, giving us the ability to build muscle and enhancing our libido. Hypogonadism, or low testosterone levels, obviously would cause the reverse to happen: It leads to loss of muscle tone and reduced sexual desire, but also deterioration of memory and certain other cognitive functions. While there are several causes of low testosterone, obesity -- called secondary hypogonadism -- can accelerate its onset and is considered to be the leading cause of the condition.
There are plenty of treatments for hypogonadism on the market, and they're proving to be a rich source of revenues. Abbott Labs (NYSE: ABT) offers AndroGel, which generated $508 million in the first half of 2012; Auxilium Pharmaceutical (Nasdaq: AUXL) makes Testim, which produced $122 million in global revenues in the first six months of this year; and Endo Pharmaceuticals has Fortesta, for which doesn't break out quarterly sales but says it was responsible in large part for the 4% increase in first-half consolidated revenues to $806 million. It launched the gel in the first quarter of last year and generated almost $15 million in full-year sales. Earlier this year, the FDA approved BioSante Pharmaceuticals' (Nasdaq: BPAX) Bio-T-Gel that it licensed to Teva Pharmaceuticals (Nasdaq: TEVA), but no launch date has been set.
As someone who was diagnosed with hypogonadism a number of years ago, any of these treatments seem preferable to the regular testosterone injections I had to give myself (even though the amount of weight I was able to bench press dramatically soared), but there's a difference between Repros' Androxal and those of its rivals: Repros' treatment is a pill, while the latter produce topical gels and also focuses specifically on secondary hypogonadism.
With late-stage clinical trials under way, investors can expect updates later in the fourth quarter and results early next year. If all goes as planned, Repros hopes to market Androxal beginning in 2014. Of course, as we all know, there's a long way to go between now and then, and there's the FDA's regulatory labyrinth to make it through. BioSante had been making progress on a "female Viagra" -- delivering testosterone through a gel to women with sexual dysfunction -- only to run in to poor results in late-stage studies.
No laughing matter
With several irons in the fire -- Repros is also developing Proellex, a treatment for female reproductive health -- and sufficient cash on hand to finance these efforts, there's no reason to expect internal disruption of its plans. It will rely upon advancing these studies, so investors can hope to see the next catalyst arrive in the next few months as it updates the market on its trials.
Yet biotech guru and highly rated Motley Fool CAPS All-Star member zzlangerhans believes there could be dilutive offerings in the future, and he has concerns about the overall efficacy of Androxal, noting it has "not clearly differentiated itself from generic clomid in terms of raising testosterone levels through testicular stimulation." With parallel concerns over Proellex, he doesn't see it being able to beat the broad market indexes.
I'll admit to having had high hopes for BioSante's LibiGel only to see them dashed, and it often seems biotech investing is something of a crapshoot. However, I'm going to rate Repros to outperform here only because it has yet to face the FDA's minotaur and still has a chance to surprise the market with seemingly positive data. But share your view in the comments box below on whether Repros Therapeutics will be able to stimulate greater interest with its testosterone therapy.
Shake, rattle, and roll
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