The Canadian healthcare stocks on our list can easily fund R&D and S&M expenses with their higher gross margins
SmallCapPower | September 22, 2017: Today we have shortlisted four Canadian healthcare stocks with TTM (Trailing Twelve Month) gross margins of over 80%. Gross margin is the basic profitability metric that measures how much money is left from sales after fixed and variable costs of production are subtracted. Gross margins are typically higher in healthcare sector particularly in drug development and health technology sub-sectors compared to manufacturing and retail sectors that have higher input costs. Healthcare companies with higher gross margins can easily fund their R&D and S&M expenses.
Aurinia Pharmaceuticals Inc. (TSX: AUP)
Aurinia Pharmaceuticals Inc. is a clinical-stage biopharmaceutical company focused on the development of therapeutic drugs to treat autoimmune diseases. The Company’s lead compound Voclosporin has completed Phase IIb clinical trial to treat patients afflicted with lupus nephritis (LN). Voclosporin has also completed two Phase III clinical studies in patients with moderate to severe psoriasis.
- TTM Revenues: $0.42 million
- Market cap: $634.0 million
- TTM Gross Margins: 99.29%
Cipher Pharmaceuticals Inc (TSX: CPH)
Cipher Pharmaceuticals Inc. is a specialty pharmaceutical dermatology company with a portfolio of commercial and late-stage products. The Company’s commercial dermatology product portfolio includes ABSORICA; SITAVIG; NUVAIL; BIONECT; CLN8; and INOVA; amongst others. Late-stage pipeline products include CF101 for plaque psoriasis, CF101 for rheumatoid arthritis, ASF-1096 and NANOLIPOLEE-007.
- TTM Revenues: $43.37 million
- Market cap: $116.9 million
- TTM Gross Margins: 91.13%
Spectral Medical Inc (TSX: EDT)
Spectral Medical Inc. is focused on the development and commercialization of a treatment for septic shock utilizing its Endotoxin Activity Assay (EAA) and the Toraymyxin (PMX) therapeutic. The Company also manufactures and sells certain reagents.
- TTM Revenues: $3.64 million
- Market cap: $75.7 million
- TTM Gross Margins: 84.58%
Knight Therapeutics Inc (TSX: GUD)
Knight Therapeutics Inc is a pharmaceutical company involved in developing, acquiring, in-licensing, out-licensing, marketing and distributing pharmaceutical products, consumer health products and medical devices in Canada and select international markets. The Company’s prescription pharmaceuticals and medical devices in various stages of development include Impavido, AzaSite, ATryn, Photofrin, ILUVIEN, TULSA-PRO, PROBUPHINE, and Advaxis Family of Products, amongst others.
- TTM Revenues: $7.97 million
- Market cap: $1,230 million
- TTM Gross Margins: 80.81%
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in any of the companies mentioned above.
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