Stock To Watch: Avanir Pharmaceuticals, Inc. AVNR

“Be fearful when others are greedy, and be greedy when others are fearful.” – Warren Buffett

With the ever-growing scientific diagnosis of our genetically imbalanced cell organization, company’s like Avanir Pharmaceuticals, Inc. (NASDAQ: AVNR) continue to give investors something to laugh and cry about depending which side of the decimal point you are. As many biopharmaceuticals, the company is focused on bringing new, innovative medicines to patients with central nervous system disorders. Avanir has cornered the market with its FDA approved NUEDEXTA® which treats PBA, the uncontrollable urge to laugh or cry (seriously).

Founded in 1988, Avanir Pharmaceuticals, Inc. has focused on products which treat central nervous system disorders together with its subsidiaries primarily in the U.S. It has streamed all its energies in acquiring, developing and commercializing unique therapeutic products like NUEDEXTA®, its cornerstone wonder drug for the treatment of pseudobulbar affect. Its product line also comprises AVP-923 in Phase II clinical trial for the treatment of central neuropathic pain in patients with multiple sclerosis; and in Phase III trial for the treatment of patients with diabetic peripheral neuropathic pain. In addition, the company provides Docosanol 10% cream, an over-the-counter product for cold sores treatment.

Avanir is in a unique “catch-22” situation with NUEDEXTA®: they have no competition but also no patients. Inspiration for this drug could have been spawned in a meeting with shareholders 10 years ago when AVNR was as low as $1.25 in September of 1999 to go as high as $33 just one year later only to decline to $3.32 by January, 2003. This year has been much kinder to the company with shares up 36.06% without much news of any new drugs in the pipeline. It’s hard to say why there’s been such an increase in share price but it is worth noting that 27.80% of the stock as shorted as of December 30, 2011. When AVNR reports in February is when investors and stock-watchers will laugh or cry wondering whether or not repeat prescriptions coupled with Doctors prescribing the drug shows good enough results for Avanir to reach its $6.50 analyst consensus estimate.

Avanir reported gross revenue for NUEDEXTA® of $4.3M for the fiscal year ended September 30, 2011.

Based in Aliso Viejo, California, Avanir Pharmacuetical’s stock is traded under the symbol AVNR on the NASDAQ Stock Exchange and has 188 listed full time employees.

Website: http://www.avanir.com/

Company Snapshot:

Trading Symbol: NASDAQ: AVNR
Last Price: $2.83
Avg Vol (3 month): 1,681,840
Avg Vol (10 day): 1,928,190
Market Cap: 359.29M
EBITDA (ttm)6: -60.19M
Total Cash (mrq): $79.54M
Shares Outstanding: 126.96 million shares
Shares Short (12/30/11): 26.34 million shares
Shares Held by Insiders: 0.30%
Institutions Holding Shares: 96
Top Institutional Holder: 18,712,447 shares
T.Rowe Price Associates, Inc.
(as of 9/30/2011)
Top Mutual Fund Holder: 6,114,700 shares
T.Rowe Price Health Sciences Fund
(as of 9/30/2011)
Contact Information: 20 Enterprise
Suite 200
Aliso Viejo, CA 92656
Investor/Analyst inquiries: Ian Clements, PhD
[email protected]
+1 (949) 389-6700
Next Earnings Date:  February 2, 2012
Profit Margin (ttm) None
Operating Margin(ttm): -577.65%
Return On Assets(ttm): -57.51%
Return On Equity(ttm): -122.06%
Qtrly Revenue Growth (yoy): N/A
Operating Cash Flow(ttm): $-56.52M
Levered Free Cash Flow(ttm): $-31.96B

 

AVNR closing price for the week that ended Friday, January 20, 2012 was $2.83, down 0.04, on volume of 1,442,184.
AVNR is trading 25.71% above its 50 day moving average and 1.03% above its 200 day moving average.
AVNR is -41.04% below its 52-week high of $4.80 and 59.89% above its 52-week low of $1.77.
AVNR‘s PE ratio is N/A and its market cap is $359.29M.
AVNR is now covered by analysts at McNicoll Lewis & Vlak. They set a “buy” rating on the stock and a $6.00 price target on the stock.

Avanir Pharmaceuticals’ Governance Risk Indicator (GRI®) as of Jan 1, 2012 is:

  • Audit (Low Concern)
  • Board (Low Concern)
  • Compensation (Medium Concern)
  • Shareholder Rights (High Concern)

Fiscal 2011 Fourth Quarter Results

  • Total net revenues for the quarter ended September 30, 2011 were $4.8 million, compared with $726,000 for the comparable quarter in 2010. Total net revenues consist of royalty revenue from Abreva® and NUEDEXTA revenue.
  • Total operating expenses were $22.5 million in the fourth quarter of fiscal 2011, compared with $9.5 million in the comparable period in fiscal 2010.
  • Cash used in operations was $14.0 million in the fourth quarter of fiscal 2011.
  • Net loss for the fiscal 2011 fourth quarter was $18.0 million, or $0.14 per share, compared with a net loss of $9.7 million, or $0.10 per share, for the same period in fiscal 2010.

Twelve-Month Results

  • Total net revenue for fiscal 2011 totaled $10.5 million compared with $2.9 million for fiscal 2010.
  • Total operating expenses were $70.7 million in fiscal 2011 compared to $29.8 million in fiscal 2010.
  • Cash used in operations was $56.5 million in fiscal 2011.
  • Net loss for fiscal 2011 was $60.6 million, or $0.51 net loss per share, compared with a net loss of $26.7 million, or $0.30 net loss per share for fiscal 2010.

Source: http://www.b2i.us/

It’s been a great couple of weeks for the stock, gaining 36.06% since January 1, 2012 but with so many short interest shares, 27.80% as of December 30, 2011 which equals 13.66 days of recent average volume, AVNR may already be squeezed out.

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