Today, let's look at three things investors should be watching regarding Astex Pharmaceuticals, which will provide us with better insight into the company.
1. Clinical-phase pipeline
Astex currently has one FDA-approved drug on the market, Dacogen, for the treatment of myelodysplastic syndrome. It markets this drug in cooperation with Eisai Pharmaceuticals in North America and Janssen Cilag, a subsidiary of Johnson & Johnson
With four drugs in phase 1 trials, five hopefuls in phase 2, and an expansion of Dacogen in phase 3 trials, Astex offers shareholders a seemingly endless parade of study data with plenty more in the pre-clinical and discovery stages. The basis for Astex's success in discovering potential therapies lies in its proprietary fragment-based drug discovery platform known as Pyramid. This technology is able to computationally determine how low-weight molecules (fragments) and proteins will interact with one another, and has allowed Astex to create a bountiful clinical-phase pipeline.
In addition to discovering potentially new therapies, a small biotechnology company having a partner with an experienced sales and marketing team, and deep pockets, is often appreciated. Astex has worked rigorously to set itself up for success by partnering with many large pharmaceutical names.
In addition to partnering with Eisai and Janssen Cilag on marketing Dacogen, Astex has collaborative clinical-phase agreements with Novartis
These partnerships provide milestone payments, and in some cases cost-sharing initiatives, which allow Astex to carry on multiple trials at the same time.
Finally, with Astex spending so much on researching and developing its now-extensive pipeline, it's imperative that you keep a close eye on its usage of cash.
Astex, thus far, has done a pretty good job of putting itself in position to receive milestone payments from its partners and spend within its means. As of its latest quarter Astex had $122.5 million in cash with no debt. Forming partnerships and Dacogen's approval have made Astex profitable and cash flow positive since 2009. Astex shareholders shouldn't have too much to worry about in terms of cash burn.
Now that you know what to watch for, it should be easier to analyze Astex Pharmaceuticals' successes and pitfalls in the future, and hopefully you'll gain a competitive investing edge.
If you're still craving even more info on Astex Pharmaceuticals, I would recommend adding the stock to your free and personalized Watchlist so you can keep up on all of the latest news with the company.
One key to Astex success is its proprietary technology. This is exactly why our team of analysts at Motley Fool Stock Advisor scoured the market for disruptive technologies and found three companies that appear set to lead the next industrial revolution in technology. Click here to get your free copy of this latest special report and find out the identity of these three companies.
Fool contributor Sean Williams has no material interest in any of the companies mentioned in this article. You can follow him on Motley Fool CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of, and creating a diagonal call position in, Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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 that has transparency written into its DNA.
More from The Motley Fool
Biotech Buyout Celebration or Raw Deal?
Will Sarissa Capital be able to stop biotech Astex Pharmaceuticals from being acquired by Otsuka?
The Rise of Little Pharma
Why focusing on Little Pharma could lead to big gains.
This Week in Biotech
A buyout that appears to be a screaming deal and data from four clinical-stage studies dominate this week's top stories.