Insmed Incorporated (INSM), WellCare Health Plans, Inc. (WCG), and Novacea, Inc. (NOVC) Look Interesting To Invest

Nov.09, 2007 in Investment Opinions, U.S Hot Stocks

Insmed Incorporated (INSM)

Company Description

Insmed Incorporated, a biopharmaceutical company, engages in the development and commercialization of drugs to treat metabolic diseases, endocrine disorders, and oncology. Its lead product candidate IPLEX, a recombinant protein product candidate, is in Phase II clinical trials for the treatment of myotonic muscular dystrophy, the common form of adult-onset muscular dystrophy. It is also conducting a Phase II clinical study for investigating IPLEX as a treatment for HIV associated adipose redistribution syndrome; a Phase I clinical study investigating IPLEX as a treatment for retinopathy of prematurity, a disease where the small blood vessels in the back of the eye and the retina grow abnormally; and an expanded access program in Italy to provide IPLEX to physicians for patients with amyotrophic lateral sclerosis, a neurodegenerative disease that affects nerve cells in the brain and the spinal cord. In addition, Insmed is developing INSM-18, a small molecule tyrosine kinase inhibitor that is under Phase I/II clinical trials for the treatment of breast, lung, pancreatic, and prostate tumors; and rhIGFBP-3, a Phase I clinical product candidate for the treatment of breast, prostate, liver, ovarian, and colon cancers. The company has license and collaborative agreements with Fujisawa Pharmaceutical Co., Ltd. to use IGF-I therapy for the treatment of extreme or severe insulin resistant diabetes; and a license to Pharmacia AB’s portfolio of regulatory filings pertaining to rhIGF. Insmed was founded in 1999 and is headquartered in Richmond, Virginia.

Rating: Buy

INSM has highest revenue growth rate in the industry…

High return with average risk.

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WellCare Health Plans, Inc. (WCG)

WellCare Health Plans, Inc. provides managed care services exclusively for government-sponsored healthcare programs, focusing on Medicaid and Medicare in the United States. It offers a range of Medicaid and Medicare plans, including health plans for families, children, the aged, blind and disabled, and prescription drug plans. The company’s Medicaid plans include plans for individuals, who are dually eligible for both Medicare and Medicaid, and recipients of the Temporary Assistance to Needy Families (TANF) programs, Supplemental Security Income (SSI) programs, State Children’s Health Insurance programs (S-CHIP), and the Family Health Plus programs (FHP). The TANF program generally provides assistance to low-income families with children and the SSI program generally provides assistance to low-income aged, blind, or disabled individuals. S-CHIP and FHP programs are designed for families, who exceed the income thresholds for Medicaid. WellCare’s Medicare plans include stand-alone prescription drug plans and Medicare Advantage plans, which include both Medicare coordinated care (MCC) plans and Medicare private fee-for-service plans. Medicare Advantage is Medicare’s managed care alternative to original Medicare fee-for-service, which individuals enroll into directly through Centers for Medicare & Medicaid Services. MCC plans are plans that are administered through a health maintenance organization and generally require members to seek health care services from a network of health care providers. PFFS plans are open-access plans that allow members to be seen by any physician or facility that participates in the Medicare program. As of December 31, 2006, it served approximately 2,258,000 members through a network of 50,000 physicians, 600 hospitals, and approximately 15,000 other ancillary providers and skilled nursing facilities.

Year over year, WellCare Health Plans, Inc. has been able to grow revenues from $1.9B to $3.8B. Most impressively, the company has been able to reduce the percentage of sales devoted to selling, general and administrative costs from 13.81% to 13.10%. This was a driver that led to a bottom line growth from $51.9M to $139.2M.

Rating: Buy

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Novacea, Inc. (NOVC)

Novacea, Inc., a biopharmaceutical company, focuses on in-licensing, developing, and commercializing therapies for the treatment of cancer. Its lead product candidate includes Asentar, which is in Phase III clinical trials for the treatment of androgen-independent prostate cancer; and AQ4N, which is in Phase 1/2 clinical trial for the treatment of glioblastoma multiforme. The company has license and collaboration agreements with Aventis Pharmaceuticals, Inc.; Oregon Health & Science University; University of Pittsburgh; KuDOS Pharmaceuticals Limited; Schering-Plough Corp.; and Pierre Fabre Medicament. The company, formerly known as D-Novo Therapeutics, Inc.

Rating: Buy

Oversold Price

High return with average risk.

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