The drought is over. Except for Bristol-Myers Squibb's
The dry streak may be broken, but don't expect this one to signal that there's a flood of interest in baby biotech IPOs quite yet. Today's offering, Cumberland Pharmaceuticals
The company has two drugs on the market already, and a third was recently approved by the Food and Drug Administration and should be on the market later this year. Acetadote is an antidote for overdoses of acetaminophen, the active ingredient in Johnson & Johnson's
The company's recently approved drug, Caldolor, is an intravenous form of ibuprofen, the active ingredient in Wyeth's
With just $35 million in sales last year, Cumberland has a long ways to go before becoming the next Pfizer
Investors are pricing Cumberland at a market cap of $290 million, which gives it a whopping P/E based on last year's earnings. Somewhere about 60, in fact. But keep in mind that sales of Caldolor should contribute to earnings and it'll realize about $75 million or so from the IPO, which Cumberland can use to license a drug or two to make better use of its sales force.
Have a thought on whether Caldolor can soothe some of the pain from Cumberland's high valuation? Post a pitch for or against Cumberland, or just make an out- or underperform call on the stock, in Motley Fool CAPS.
More Foolishness on IPOs:
Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is an Inside Value pick. Johnson & Johnson is an Income Investor selection. The Fool has a disclosure policy.