Trius Therapeutics, Inc. (TSRX), Cubist Pharmaceuticals Inc (CBST), Pfizer Inc. (PFE): A Portfolio Of Potential

Does any of this matter?
If Dificid ramps to $200 million per year and tedizolid generates anywhere near its potential, Cubist Pharmaceuticals Inc (NASDAQ:CBST) should be able to overcome a big drop in sales from its nearly $900 million Cubicin franchise rather easily. Throw in the company’s four additional phase 3 trials in the pipeline and future prospects gets quite rosy, or at least not as dismal as once thought. However, investors should also question how much growth and revenue fortification is already factored into shares.

It is difficult to endorse an investment in Cubist Pharmaceuticals Inc (NASDAQ:CBST) at a market cap over $4.2 billion and a P/E that is approaching 50. Consider that the company would need to double EPS for its P/E to fall to just 23 — something that will be difficult to do overnight while ramping sales of new products. With a sizable amount of future sales from its two newest additions mostly replacing an anticipated fall in Cubicin revenue in the next several years, any investment at these prices would have to factor in a lot of potential for its late-stage pipeline. I’m not sure I would be willing to make that bet at this point.

The article Will Cubist’s Buying Spree Be Enough for Investors? originally appeared on

Fool contributor Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio or his CAPS page, or follow him on Twitter, @BlacknGoldFool, to keep up with his writing on energy, bioprocessing, and biotechnology.The Motley Fool recommends Cubist Pharmaceuticals. 

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