This Stock Is En Fuego, and Nothing Can Stop It!

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Pardon the pedestaling, but Dan Patrick is one of my favorite sports broadcasters of all time. I grew up watching Dan Patrick on ESPN where he remained an anchor for 17 years and coined the popular phrases "en fuego" and, "You can't stop him; you can only hope to contain him." Well, Dan, have I got the perfect stock for you!

Meet Jazz Pharmaceuticals (NAS: JAZZ) , just your run-of-the-mill biopharmaceutical company that can't be stopped -- you can only hope to contain it.

Jazz reported fourth-quarter and full-year results earlier in the week that crushed Wall Street's already aggressive estimates. For the focus of this discussion, I'm just going to rely on the company's full-year results.

Sales of its primary drug, Xyrem, which is used to treat narcolepsy, grew by 64% in 2011 to $233 million with overall volume jumping by 11%. Did you notice the major disconnect there? Relax, it's a good thing. It means that Jazz has incredible pricing power when it comes to Xyrem since there's really no substitute for the drug, which has allowed it to pass along price increases to patients and insurers.

Xyrem's only true competitor is Provigil, which is produced by Cephalon and now owned by Teva Pharmaceutical (NAS: TEVA) . Provigil and Xyrem are both approved to treat excessive daytime sleepiness, but only Xyrem is approved for the treatment of cataplexy (a strong emotional response that can cause the user to lose consciousness) as well. As I said, there's really no substitute.

Jazz's remaining pipeline drugs are en fuego as well. Sales for Luvox, the company's obsessive-compulsive disorder treatment, increased 21% to $33.2 million in 2011. The recently acquired Azur Pharma reported a 13% increase in annual revenue to $94.2 million.

This is a pretty amazing feat considering Luvox is facing some pretty stiff competition with regards to OCD treatments. Paxil by GlaxoSmithKline (NYS: GSK) , Zoloft by Pfizer (NYS: PFE) , and Prozac from Eli Lilly (NYS: LLY) are all significantly higher-dollar revenue streams, yet Luvox has slowly been able to chip away and grow revenue by double-digits.

Jazz has now raised earnings estimates multiple times in the past year and is projected to grow revenue (with the addition of Azur) by 82% in 2012 and at an annualized pace of more than 30% over the next five years. What's crazy is that following the stock's fivefold increase in just the past two years, it's still incredibly inexpensive. Based on the recently raised guidance, Jazz is trading at only 12 times forward earnings despite its 29% long-term growth rate. As I said, you can't stop Jazz; you can only hope to contain it.

In my opinion, Jazz could still knock one out of the park. Since making a CAPScall of outperform on Jazz in my primary CAPS account, I am up by 88% and feel it has a shot to double yet again in 2012.

Disagree with me? Share your opinion -- even if it includes your favorite Dan Patrick moment -- in the comments section below and consider adding Jazz Pharmaceuticals to your free and personalized watchlist.

At the time this article was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. His Dan Patrick moment is when he enters a Starbucks. He can't be stopped; he can only be contained. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Teva Pharmaceutical. Motley Fool newsletter services have recommended buying shares of Teva Pharmaceutical, GlaxoSmithKline, and Pfizer. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that always knocks it out of the ballpark.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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