Chris Lau
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Chris Lau in Value Stocks,

Does ARIAD Pharmaceuticals Has More Upside?

Do not look now, but ARIAD Pharmaceuticals (ARIA) is at yearly highs. After reporting a drop in costs, higher R&D spend, and higher revenue, the stock is holding steadily higher.

The company’s drug developments show promise. In the second quarter, the company started Phase 3 clinical trial of brigatinib in patients with ALK positive locally advanced or metastatic non- small cell lung cancer (source). The company reported Phase 2 PACE clinical trial of Iclusig results at the ASCO and EHA conferences.

AP32788 is showing promise for Ariad.

In the second quarter, ARIAD’s revenue grew 134% on Icusig sales. Though $25.5M is due to a one-time reimbursement, expect lower DSOs to translate to higher revenue growth.

Raising prices of Iclusig by $8 will also help gross profit margin.

ARIAD obviously has more upside, but value investors may want the stock pulling back before considering this stock.

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