Epizyme Inc (EPZM), Portola Pharmaceuticals Inc (PTLA): Why Are These Two Recent IPOs So Promising To You?

Epizyme Inc (NASDAQ:EPZM) and Portola Pharmaceuticals Inc (NASDAQ:PTLA), are two pharmaceutical companies that recently filed IPOs. As sub-$600 million companies they are relatively unknown and have received very little coverage to-date. However, both have very promising pipelines with the potential to produce large revenue for many years to come. As a result, let’s take a look and determine if the risk is worth the reward, and whether or not these two stocks would make nice additions to your portfolio.

Making strides in treating genetically defined cancers

Epizyme is a biopharmaceutical company that discovers, develops and plans to offer innovative personalized therapeutics for patients with genetically defined cancers. The company has set its sights on developing a drug for certain types of cancers, including hematological cancers and solid tumors. The best part is that not only does Epizyme Inc (NASDAQ:EPZM) want to treat cancer symptoms, but their goal is to find the underlying causes of certain types of cancer.

Provided with a strong support group with investors such as New Enterprise Associates, Kleiner Perkins Caufield & Byers, Bay City Capital and MPM Capital, these, as well as an affiliate of Celgene, are providing a hefty cash flow; as of March 31, 2013, Epizyme Inc (NASDAQ:EPZM) had $85 million in cash and cash equivalents.

Epizyme Inc (NASDAQ:EPZM) is only in Phase 1-2 trials.  If these trials, based on small molecule therapeutics, turn out to be successful, certain types of leukemia would be able to go into remission, thus making for a huge breakthrough in the medical field and providing a much needed optimistic disposition in the diagnostics of the dreaded disease. During the escalation phase of experimentation, one of the patients experienced a 90% reduction in circulating leukemic blast count in her blood by the fifth day of EPZ-5676 treatment.

Epizyme Inc (NASDAQ:EPZM) IPO’d at $15 per share on May 31, 2013. The equity nearly doubled in a matter of three days. Why? It could be that Epizyme has its funding in place–over $1 billion in fact–to continue its research and operations. Or, it could be its potential, as Epizyme’s approach could produce sales north of $1 billion, and might also result in an orphan designation. Thus, its $660 million market cap is not expensive, if in fact the data continues to impress. If it does, this could be a great investment for several years to come.

Diversified, late-stage company with loads of upside

Portola Pharmaceuticals Inc (NASDAQ:PTLA) is a biopharmaceutical company focused on the development and commercialization of novel therapeutics in areas of thrombosis, hematologic disorders and inflammation for patients who currently have either very limited treatment, or no treatment options at all. Based out of South San Francisco, CA., Portola scheduled a $100 million IPO with a market capitalization of $469 million at a price range mid-point of $14, on Wednesday, May 22, 2013.

A clinical study, which is in Phase III, investigates the company’s oral, once a day lead product called Betrixaban, with comparison to an injection of enoxaparin in acute medically ill patients with restricted mobility and other risk factors. Based on the anticipation enrollment of 6,850 patients, Portola Pharmaceuticals Inc (NASDAQ:PTLA) expects its current Phase III study of Betrixaban, or APEX, to be completed by summer of 2015.

The company is also planning to file an investigational new drug application with the United States Food and Drug Administration before the year ends in the hopes of advancing PRT2070, which has already been pre-clinically tested for treatment and prevention of ophthalmological diseases.

Currently, Portola Pharmaceuticals Inc (NASDAQ:PTLA) has 28 issued U.S. patents, 43 U.S. patent applications and 93 issued patents and 170 patent applications in other jurisdictions. They are also the co-owner of 12 additional patents and patent applications. By the end of April, Portola had licensed 156 issued patents and 78 patent applications from third parties, mostly on an exclusive basis.

With a large IP portfolio, a late-stage product, and a large patient population, Portola Pharmaceuticals Inc (NASDAQ:PTLA)presents large upside potential. Betrixaban alone has peak sales potential of $500 million, with the potential for expanded indications. Thus, with two years until data and enough cash to avoid dilution, Portola Pharmaceuticals Inc (NASDAQ:PTLA) looks to be a safe, under-the-radar investment that could produce very large gains pending a successful Phase III study.


So there are many reasons why these two stocks are performing so well, the number one reason is probably that the human race has great hope and high expectations. Looking at both companies at a distance, one can see that both bio-pharmaceutical companies have strong support through in-depth collaboration and investment density.

Both companies are in fact providing hope for many patients across the globe through the introduction of breakthrough drugs that would offer a cure to a widespread problem. Both companies have preservation, they know what the public needs, and refuse to give up. I believe these pharmaceutical companies will revolutionize today’s diagnoses and treatments of diseases the way Apple revolutionized digital music with its iPods and its computing devices with iPad.

In other words, these are two recent IPOs, and bio pharmaceutical companies, that I like very much in the years ahead.

The article Why Are These 2 Recent IPOs So Promising To You? originally appeared on Fool.com and is written by Sherrie Stone.

Sherrie Stone has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Sherrie is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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