Biotech Values

[mcbio]

Re: ADLR

ADLR looks a buy 2 me. Are you in? Average if i may?

I am not long ADLR at the present time, but it is near the top of my watch list. The stock sits at about a $70M market cap, the company brought their own drug to market in conjunction with GSK for which they expect to receive $30-$35M in royalties this year, and they have no debt. I don't know what projections are for the future but I assume that $30-$35M/year in Entereg royalties due ADLR can be expected to be a floor as sales have been growing nicely.

Then you factor in the pipeline with two drugs for the high-risk/high-reward Delta program in Phase 2 and two drugs in the lower-risk but still high-reward OBD program in Phase 1. Note that at one point ADLR traded at close to a $1B market cap largely tied to the possibility of Entereg being approved for OBD (it's a large market opportunity).

I like that ADLR has been able to sign big pharma partners in GSK and PFE as well. However, I think it's important to note that one of the Delta compounds partnered with PFE already flopped in its initial Phase 2 trial. Results are due soon for what is apparently a re-formulated drug and for the other Delta drug so I need to see what those drugs do in the Phase 2a trials. If they flop and the stock tanks, I'm even more interested given the OBD program. If positive and the stock doesn't rise too much, I'd be quite interested.