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Why Progenics Is Poised to Pull Back

By Brian D. Pacampara, CFA - Apr 24, 2013 at 10:38AM

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Market-lagging returns could be written in this 2-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company Progenics Pharmaceuticals (PGNX) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Progenics and see what CAPS investors are saying about the stock right now.

Progenics facts

Headquarters (founded)

Tarrytown, N.Y. (1986)

Market Cap

$224.3 million

Industry

Biotechnology

Trailing-12-Month Revenue

$14.1 million

Management

CEO Mark Baker (since 2011)
CFO Angelo Lovallo Jr. (since 2011)

Return on Capital (average, past 3 years)

(25.5%)

Cash/Debt

$58.8 million / $0

Competitors

Dendreon
Nektar Therapeutics

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 11% of the 192 members who have rated Progenics believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star zzlangerhans, succinctly summed up the bear case for our community:

Right now, I'm not seeing anything that makes Progenics at a cap of [$220M] more valuable than it was last October with a cap of [$110M] (or November with a cap of [$60M]). The purchase of Molecular Insight for 5.6M shares of common stock is a particular headscratcher. ... No one wanted them then, so why does Progenics want them now? It seems they're planning to unlock hidden value by using Molecular Insight's technology to create a PSMA-based prostate cancer diagnostic, but I have to say that any hidden value in Molecular Insight is extremely well hidden.

A phase II trial of PSMA cancer vaccine won't even complete enrollment until the end of the year, so I don't see any catalysts coming from that glacially progressing program this year. Relistor royalty revenues will continue to suck. As always, it's anyone's guess what will happen to Progenics' share price in the short term, but anyone foolish enough to be long at these levels needs to remember that the share price could just as easily be [$1] as [$5].

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Stocks Mentioned

Progenics Pharmaceuticals, Inc. Stock Quote
Progenics Pharmaceuticals, Inc.
PGNX
Nektar Therapeutics Stock Quote
Nektar Therapeutics
NKTR
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