click here for complete $ADLR company research page
Let's get right to the point. ADLR is dirt cheap. But that doesn't necessarily make it a buy. When ADLR posts full-year 2010 results this Wednesday 2/23/2011, they will have $40-45m in cash and an enterprise value less than $20m. This is certainly a rarity for a company receiving royalties on a marketed drug. Sales of Entereg (alvimopan) have been gradually increasing but slower than forecast- causing the company to withdraw its guidance last summer. The actual cash that ADLR received from GSK for Entereg sales in 2010 will be in the neighborhood of $10m, not nearly enough to cover cash burn.
The data on Entereg continue to be nice, as indicated by the cohort comparative study of 7000 patients that I link to and summarize on the ADLR stock research page. The treatment clearly improves morbidity outcomes, shortens hospital stays, and therefore will save more in healthcare expenses than it costs ($500-1000 per patient). However, sales are anemic and there has been concern about whether GSK will continue to sell the drug.