When you are looking to add a biotech stock to your portfolio, most of the small cap biotech stocks have a small-sized pipeline. Also, the small cap biotechs tend to target one area; for example, they may only target cancer. This brings up a biotech that will have substantial value in the future. This biotech company is known as Opko Health Inc. (NYSE:OPK) which has diversified itself in targeting many types of diseases.
Diversity is the key to success
The types of categories that Opko Health Inc. (NYSE:OPK) is diversified in are: Rolapitant, AntagoNAT, and JNK kinase. There are other areas as well, such as 2 diagnostic tests, but these are the important ones to focus on in this article. The company is run by Chairman, and CEO Dr. Phillip Frost. Dr. Frost is best known for buying up small cap biotech companies and then selling them to big pharmaceutical companies. For example Dr. Frost sold IVAX for $7.5 billion to Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) back in 2005. This is part of what the CEO Dr. Frost has done to be known as a success in the biotech industry.
Rolapitant was a drug that was acquired by Opko Health Inc. (NYSE:OPK) from Schering-Plough. The drug is used to treat cancer patients who are suffering from nausea and vomiting from chemotherapy. This drug is currently in a phase three trial, and will be huge for this company if it is approved by the FDA. One key advantage about this drug is that it works in cancer patients several days after it’s taken. Dr. Frost knew of a biotech company that has dealt with this type of drug before, so he licensed it out to TESARO Inc (NASDAQ:TSRO). Opko Health Inc. (NYSE:OPK) will receive milestone payments, and royalty from sales when the product is approved for marketing.
AntagoNAT is an RNA drug that helps create proteins. Opko Health Inc. (NYSE:OPK) also acquired the company that led the research in this RNA oligonucleotide field. This company, that Opko Health Inc. (NYSE:OPK) acquired back in 2011, was a privately held company known as Curnamona Energy Pty Ltd (ASX:CUY). The good part about this drug is that it is not specifically made to target only one disease. With this drug, the company can go after cancer, heart disease, metabolic disorders, and genetic anomalies. If all goes well with early stage toxicology tests, the company can make billions from this type of drug.
There are many types of Neurodegenerative disorders, and it seems that Opko may have the drug molecule to help these patients that suffer each day. Opko had licensed a drug from Scripps Research Institute in which it stops cell death in neurodegenerative disorders. A lot of the neurons in diseases like Parkinson’s disease arise from cell death. This drug that Opko licensed was shown in preclinical models in animals to stop this cell death. This market is of substantial size coming in at $2.6 billion, so, this success would bring a lot of value for the company.