Canadian healthcare and pharmaceutical stocks have been booming during the past couple of years. However, is the drive up in price fundamentally explained by the performance of the company? In a market with an average sales multiple (Enterprise Value divided by Revenue) in the 3-5x region, and a P/E (Market Cap divided by Net Income) at 15-20x, the stocks on our list today seem highly overbought and could be susceptible to a selloff.
TSO3 Inc. (TSX: TOS) – $1.82
Biotechnology & Medical Research
TSO3 Inc.’s activities encompass research and development, commercialization and licensing of sterilization processes, related consumable supplies, and accessories for heat sensitive medical devices. The Company designs products for sterile processing areas in the hospital environment and offers a replacement solution to other low temperature sterilization processes currently used in hospitals. The two products the company offers are Sterizone 125 litre+ and the 125 liter Ozone Sterilizer.
- Market Cap: $150,874,029
- Price Change (2 years): 156.3%
- EV/Revenue: 308.4x
- P/E: -22.8x
Aurinia Pharmaceuticals Inc. (TSX: AUP) – $3.96
Biotechnology & Medical Research
Aurinia Pharmaceuticals Inc. (Aurinia) is a Canada-based, clinical stage pharmaceutical company focused on the development of its therapeutic immunomodulating drug candidate, voclosporin, which is a calcineurin inhibitor (CNI). Voclosporin is an oral drug, administered twice daily. Voclosporin is used as a treatment for lupus nephritis (LN), an inflammation of the kidney that if untreated or inadequately treated can lead to end-stage renal disease, the requirement for life-long dialysis, or death.
- Market Cap: $128,211,770
- Price Change (2 years): 98.0%
- EV/Revenue: 301.0x
- P/E: -6.3x
ProMetic Life Sciences Inc. (TSX: PLI) – $1.71
Pharmaceuticals
ProMetic Life Sciences Inc. (ProMetic) is a Canada-based biopharmaceutical company that offers solutions in bioseparations, plasma-derived therapeutics and small-molecule drug development. ProMetic offers its technologies for large-scale purification of biologics, drug development, proteomics and the elimination of pathogens. The Company operates through two segments: Therapeutics and Protein Technology.
- Market Cap: $993,031,970
- Price Change (2 years): 271.7%
- EV/Revenue: 56.1x
- P/E: -24.2x
Concordia Healthcare Corp. (TSX: CXR) – $91.50
Pharmaceuticals
Concordia Healthcare Corp. is a Canada-based diverse healthcare company that is focused on legacy pharmaceutical products and orphan drugs. The Company operates through three segments, which includes its Legacy Pharmaceutical Division, Concordia Pharmaceuticals Inc., which consists of 23 products, including Nilandron, for the treatment of metastatic prostate cancer; Dibenzyline, for the treatment of pheochromocytoma; Lanoxin, for the treatment of mild-to-moderate heart failure and atrial fibrillation; Plaquenil, for the treatment of lupus and rheumatoid arthritis; Donnatal, for the treatment of irritable bowel syndrome, and Zonegran (zonisamide), for treatment of partial seizures in adults with epilepsy.
- Market Cap: $3,086,893,410
- Price Change (2 years): 1630.1%
- EV/Revenue: 19.6x
- P/E: 136.5x
Theratechnologies Inc. (TSX: TH) – $2.22
Pharmaceuticals
Theratechnologies Inc. is a Canada-based pharmaceutical company that addresses unmet medical needs in metabolic disorders. The Company’s product EGRIFTA (tesamorelin for injection), approved by the United States Food and Drug Administration, helps to reduce excess abdominal fat in HIV-infected patients with lipodystrophy. EGRIFTA (tesamorelin for injection) was also approved by Health Canada for the treatment of excess visceral adipose tissue (VAT) in treatment-experienced adult HIV-infected patients.
- Market Cap: $146,160,015
- Price Change (2 years): 640.0%
- EV/Revenue: 11.0x
- P/E: -18.0x
