Investing in small cap companies is never a sure thing, but the reward potential is as great as the risk. Keeping your eyes peeled on this market will help you better weather the storm. But be vigilant! These shares can change at a moment’s notice.
On the radar today is biotech stock, Innoviva Inc (NASDAQ:INVA). Currently selling for $14.35 USD, INVA stock has gained 17.6% year-to-date and could continue the trend.
Innoviva works hand-in-hand with pharma giant GlaxoSmithKline (NYSE:GSK). As such, investors may feel a sense of assuredness with these stocks. The pair have a tight relationship making and marketing inhaled drugs such as Anoro and Relvar/Breo.
The treatments are delivered to patients via Innoviva’s Ellipta device, and the overall aim is to treat respiratory problems such as asthma and COPD. There’s no doubt that Innoviva’s presence within the drug industry is greatly boosted by having GSK in its corner. But the behemoth is just as dependent on Innoviva for its Ellipta system.
As, according to Investorplace.com, “Even the FDA approvals are for the combination of the drugs and the device together”.
The arrangement sees Innoviva make its money from royalty rates that “are only a small fraction of either drug’s sales”. Even so, its revenue grew an estimated 63% in 2017. And recently, according to SimplyWallStreet:
“Innoviva’s EPS shot from US$1.40 to US$3.95, over the last year. Year on year growth of 183% is certainly a sight to behold”.
In recent months, specifically since the end of February, INVA stock has dropped significantly. By January end, shares topped $20, but a massive crash soon after saw them lose over 25% in value.
Now, at $14.37 USD, Innoviva might intrigue the investor who enjoys company’s that “have revenue, and even earn profits.” There could be a potential rebound ahead, but as always with the biotechnology sector it will be the next approval, denial, successful trial or failed attempt that will dictate these shares.
So keep your ears to Innoviva news in the coming weeks.
Featured Image: Deposit Photos/Gorodenkoff