Millions of Americans tuned in to listen to the President deliver his State of the Union address. Healthcare, a hot button issue, was especially scrutinized as the president spoke on Medicare and the Affordable Care Act. The President said, “On Medicare, I’m prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade. Already, the Affordable Care Act is helping to slow the growth of health care costs. The reforms I’m proposing go even further. We’ll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors. We’ll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn’t be based on the number of tests ordered or days spent in the hospital; they should be based on the quality of care that our seniors receive.”
In light of the President’s speech, there are three healthcare stocks to consider with special emphasis on the direction that they may take in the coming weeks. As February draws to an end, pay special attention to Amicus Therapeutics, Inc (NASDAQ: FOLD) with its $137.4 million market cap. The company is making advancements in its Chaperone-Enzyme Replacement Therapy (ERT) Combination Platform in the battle against Pompe disease. The advancement has already led to a contract with Laureate Pharmaceuticals to manufacture a proprietary rhGAA enzyme leading to the possibility of managing or even curing Pompe disease. Pompe disease is a lysosomal storage disease which is usually characterized by a progressing weakening of the skeletal muscles. The disease is said to affect between 5,000 and 10,000 people worldwide. Interestingly, Amicus Therapeutics innovative approach to dealing with Pompe and other LSDs may go a long way in setting it up as leading player in the new age of Medicare.
Another company to watch this February and possibly into early March, is AngioDynamics, Inc. (NASDAQ: ANGO) with a market cap of $434.03million. The company made news last year with a buy-out strategy that saw it spending about $370 million, almost equal to its present day value. AngioDynamics also acquired Microsulis Medical Ltd. recently for $15 million. While the acquisitions appear to make business sense on paper (the company has forecast a 66 percent boost in revenue) the realities may be different.
Two other companies to consider are Albany Molecular Research, Inc. (NASDAQ: AMRI) with a $248.63 million market cap and Codexis (NASDAQ: CDXS) with its $89.15 million market cap. The companies recently announced a two-year agreement for a SMARTSOURCING partnership. While the partnership appears to be just another business deal on the surface; the possibility that the two companies will emerge stronger and poised for future profitability cannot be overemphasized. This is based on AMRI’s manufacturing capabilities and Codexis’ directed Evolution Technologies.