By Hassan Malik
@hmalik21
Pharmaceutical
companies seem to be the “in thing” right now. With Ebola surfacing in the U.S,
many are dubious as to what the right remedy is. Investors are no different, it
seems that it is becoming increasingly more rigorous to invest your money in a
reliable pharmaceutical company in hopes for some returns. Two weeks ago, the
company making outrageous gains was iBio but of course as of Tuesday October
28, 2014, the share price of the stock plunged dramatically following a
potential lawsuit.
When looking at
pharmaceutical companies in relation to global epidemics like the Ebola virus,
I believe that it is important to distinguish ambition from feasibility.
Investors have seen the rocky path that companies took in the last three weeks
in relation to the Ebola. As cases subsided, shares plunged. One company that I
believe has a strategic advantage is Agios
Pharmaceuticals (NASDAQ: AGIO). The share price of
the company is currently at $82.44. Unlike other pharmaceutical
companies, Agios Pharmaceuticals isn’t specifically concerned with Ebola
related vaccines or products giving it stability. It is rather focused on
discovering and developing novel drugs to treat cancer and rare genetic
disorders. It also has many state of the art investigational medicine centers.
The company is set to release its third quarter financial results on November 7.
From a cash flow perspective, we will note that Agios has made a huge jump from
2011 to 2013. Cash flow for the company in 2011 was $15,219,000 and was
$56,400,000 in the year ending December 31, 2013. That is nearly a 271%
increase. Total cash flow from investing activities has largely been favorable
as well. For the year ending on December 31, 2013, total cash flow from
investing was $87,217,000 compared to the $22,360,000 in 2011. The net income
applicable to common shares has also substantially increased from 2011-2013. In
the year ending December 31, 2013, the figure was $43,569,000 compared to
$26,806,000 in 2011.
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