Looking at Antares Pharmaceutical, Inc. (ATRS) from a technical perspective

Jul 16, 2012 -

Antares Pharmaceutical, Inc. (ATRS)

Background 

Undoubtedly, Antares (ATRS) is a pharmaceutical company. Their focus is on developing  efficient and effective methods in which drugs can be given/taken. The result is a safer and more efficient way of giving a dosage and a reduction of side effects. Antares' products include self-injection devices and topical (applied to the skin surface) gel-based products. Their self-injection products in essence look like thick highlighter pens. They are designed to make taking drugs easier and more comfortable. 

tjet.jpg
Medi-Jector is used to take TEV-TROPIN® brand human growth hormone
Current and future financial outlook

The company has not been profitable in recent years. This is to be expected as they are still largely in their research and development phase. Still they have products currently selling and many more products in the pipeline. As a result, Antares has been able to reduce loss over the past three years from $10M in FY 2009 to $6M in FY 2010 and finally to $4M in FY2011. That is an over 50% reduction in losses in two years. While you may argue that this is evidently possible if you don't spend any money, but the company has a number of products with significant partners in the pipeline. These partners include Jazz, Watson, TEVA, and most notably Pfizer. Also, a quick look at the 2011 10-K, shows that they do not have any long term debt. In fact, they have assets of $40M versus liabilities of $10M.

ATRS Product Pipelines (from the company's website)


Certainly when we check their stock price, it is evident that their progress has been reflected in their stock price. ATRS has been on an incredible run the past two years. It has gone from about 1.30/share to 5.25/share that is about a 323% return. 

ATRS recently announced positive result from their VIBEX MTX usability study. In laymen terms, the VIBEX is an auto injector designed to self-administer a weekly injection of methotrexate for the treatment of rheumatoid arthritis. In the past few days it popped just above $5/share and recorded a 50% increase in stock price. For the month it looks like it almost doubled from 2.77/share to 5.25/share.

The question now is when would be a good place to get in on the stock. Right now it looks like it is overextended and would be optimal to enter in at around 4.25/share. That way the gap will fill and hopefully it will be oversold by then. This would be just around a 38% retracement from the high. But, if it breaks through that 5.25 resistance, we could be in for a wild ride upward. My outlook is that when a stock goes up this much in such a short amount of time, there will be profit takers and when the dust settles that is when it is a good time to enter. But, these pharmaceutical stocks are very volatile and at any FDA failure could drop 50% within days. 



Disclaimer: This article is written for informational purposes only and isn't intended as investment advice.

Disclosure: I am long ATRS.
 
Copyright © 2007- StockKevin. Disclaimer. All Rights Reserved.