The per-earnings release mood overrode Idenix Pharmaceuticals, Inc. (NASDAQ:IDIX) as well and as the mood was obviously optimistic, the stock made one of the biggest increases in its industry on Friday. With the 52-week high being updated once again, the earnings call will have to bring milestone results today.Over an 8.87% jump Idenix closed at $5.89 for a share on Friday. A new 52-week high is not news, as it happened a number of times this month. However, the question is if it reflects solely grounded investor excitement about the future of the biotechnology company. Because, there could be some noise trading as well, since the recent rapid value gains of Idenix stock have been alerted to investors since the middle of June and must have created additional demand for the stock.
An earnings call to discuss the company’s second quarter results and to provide an update on the company’s development programs is expected after the market closes today. Hopefully, investors will get the currently nearly 40 times sector overvaluation justified by some milestone improvements and not get rapidly disappointed instead, as it happened the last time when the quarter results were announced.
The latest news from the company date back to the middle of last month, when a press release announced that a three-day proof-of-concept study will be initiated for Idenix product candidate for the treatment of hepatitis C virus infection. Although no results announcement followed, around two weeks ago an investment banking firm initiated coverage for the stock, with a buy recommendation. It was on the day on which the previous 52-week high was recorded.
According to the latest financial results, Idenix has $81.7 million in liabilities and only $61 million in assets. Currently, the company focuses on developing product candidates for the treatment of hepatitis C virus and has one already approved drug for the treatment of hepatitis B virus, which is however licensed to another company with Idenix receiving only royalties on the sales. This is also the smaller part of the company’s revenues, which consist mostly of license fees.
In the future, some of the huge research and development expenses can be shared under Idenix’ collaboration agreements, though losses are expected to continue as no products will be launched on the market soon. Further, it will take time until the initiated restructuring plan shows positive results, and it is probably some first cost savings that the market now eagerly wants to see.
