The Medicines Company (MDCO), Merck & Co., Inc. (MRK), Baxter International Inc. (BAX): Three Reasons to Like This Critical Care Company

Page 1 of 2

The Medicines Company (NASDAQ:MDCO) is a mid-cap value stock that jumped by 21% in the last 12 months, trading at a 52-week price range of $20.04-$37.40. This is backed by strong performance and significant sales growth in marketed products such as anticoagulants. Essentially, the company provides medical solutions for the treatment of critical care patients in hospitals. I consider this an investment-grade company based on the following factors:

Solid portfolio with wide range of products and product candidates

Opportunity in highly competitive critical care and anticoagulant markets

Sales growth driving positive performance

The Medicines Company

Diversified portfolio
The company has three marketed products and five in different development stages. Importantly, all of them are focused on critical care therapeutics, which creates technology depth for the company. The marketed products in the U.S. include Angiomax, Cleviprex, and Argatroban.

: Angiomax injection, an anticoagulant agent, is used to prevent the formation of blood clots that lead to heart attack or stroke.

: Used as an anticoagulant in adult patients.

: Indicated for the reduction of blood pressure when oral therapy is not feasible.

Moreover, the pipeline includes a variety of product candidates. Of them, three products — cangrelor, oritavancin and MDCO-157 — are in advanced stages, and two — MDCO-2010 and MDCO-216 — are in early stages of development. The company also has a portfolio of generic products used for acute care. In addition, it co-partners with AstraZeneca to market the oral antiplatelet drug Brilinta in the U.S. and with Bristol-Myers Squibb for Recothrom in the global market. Recothrom is a surgical hemostat that is applied topically during surgery to stop bleeding.

Opportunity in anticoagulant and critical care therapeutics markets
More than 5 million patients are admitted to American intensive care units annually, primarily for critical medical conditions including respiratory failure, postoperative management, stroke and heart failure. Increasingly, infants and the older population are getting admitted. According to GBI Research estimates, the overall critical care therapeutics market value is expected to grow at a compounded annual growth rate of 5% to reach $3.2 billion in 2019. The growth is largely driven by increasing demand of existing products, and approval and launches of new products.

The anticoagulant therapies market is large, and competition is very intense due to the incidence and severity of cardiovascular diseases. There are a number of anticoagulant therapies currently available in the market. New products such as oral anticoagulants are also in many pipelines. MarketResearch also estimates that the U.S. anticoagulants market will grow from $7.06 billion in 2012 to $15.32 billion in 2019. The Medicines Company (NASDAQ:MDCO) focuses mostly on the U.S. market and generates more than 90% of revenues from the U.S. Assuming even a 2% market share for its candidate product Angiomax, market opportunity for the company in the anticoagulant market will be around $170-$200 million by 2015.

Position among peers
Angiomax competes primarily with Eli Lilly’s ReoPro and Integrilin from Merck & Co., Inc. (NYSE:MRK). Integrilin is a platelet aggregation inhibitor indicated for the treatment of acute coronary syndrome and percutaneous coronary intervention. The product is losing its sales quarterly, possibly due to advent of new drugs and generic products. It is expected to decrease further in coming quarters. In the second quarter of 2013, Merck & Co., Inc. (NYSE:MRK)’s sales were down by 7% to $11 billion, and adjusted net income also decreased by 24% to $2.5 billion, or $0.84 per share, compared to same period last year. I suspect that this trend will continue for the next quarter.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!