Volatility is definitely the norm when it comes to biotech stocks, but newly public biotech companies have particularly volatile share prices. With only a year on the public market and a share price that ranged from $11 to $35 in that time, Aspreva Pharmaceuticals (NASDAQ:ASPV) definitely fits the mold of a young and wild biopharma stock.

Yesterday, the company released its second-quarter earnings results. Revenues have been increasing rapidly because of the company's one drug, CellCept, which is used to prevent organ transplant rejection. CellCept is marketed by Roche, and Aspreva earns royalties on the drug.

For the second quarter, CellCept royalties grew 246% versus the same time last year. Net income has similarly been speedily growing from its tiny year-ago comparables. For 2006, the company estimates total year revenues to be north of $200 million.

The table below lists the revenue, net income, and net margins generated by Aspreva:

Revenue

Net Income

Net margin

Q2 06

$52

$28

54%

Q1 06

$63

$45

71%

Q4 05

$45

$24

53%

Q3 05

$17

$3

18%

Q2 05

$15

$1

7%

*All numbers in millions

As can be seen above, there is some seasonality in CellCept sales, so the small sequential decline in royalties is nothing to be worried about. Similarly, the sequentially declining net margins could seem worrying, but this is actually the result of increased research funding for various CellCept clinical trials.

Expanding the potential market opportunities for CellCept is a wise move by Aspreva, because this could drive even greater revenue growth in the future. By the end of 2007, the company will have completed phase 3 trials in new indications for CellCept.

Solidly profitable and with $192 million in the bank at the end of the second quarter, Aspreva investors don't have to worry about the company doing any dilutive financings in the near future (unless a potential acquisition or license opportunity comes about).

With rapidly growing royalties from CellCept, and the potential to expand the drug into new indications, shares of Aspreva are attractive at current levels, as long as the company does not make any bad acquisitions with its cash hoard.

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Fool contributor Brian Lawler does not own shares of Aspreva. He welcomes your feedback. The Fool has a disclosure policy .