Why Synageva Is Poised to Underperform

Before you go, we thought you'd like these...
Before you go close icon

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Synageva BioPharma has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Synageva and see what CAPS investors are saying about the stock right now.

Synageva facts

Headquarters (founded)

Lexington, Mass. (1996)

Market Cap

$1.2 billion

Industry

Biotechnology

Trailing-12-Month Revenue

$11.7 million

Management

CEO Sanj Patel (since 2008)
CFO Carsten Boess (since 2011)

Trailing-12-Month Return on Equity

(29.2%)

Cash/Debt

$233.4 million / $0

Competitors

Gilead Sciences
Merck
Pfizer


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 83% of the 12 members who have rated Synageva believe the stock will underperform the S&P 500 going forward.

Earlier this week, one of those Fools, All-Star zzlangerhans, succinctly summed up the bear case for our community:

I imagine that Synageva bulls, who maintain a low profile, look to [Alexion Pharmaceuticals ] as a model for a multi-billion company treating a single orphan disease. However, no other companies developing replacement therapies for orphan congenital diseases have come close to Alexion's success. ...

Synageva has only completed a single phase I/II trial of sebelipase alfa for CESD, and to the best of my knowledge has not announced concrete plans for further trials. ...

I also find it concerning that Synageva obtained their public listing via a reverse merger with zombie biopharma Trimeris in July 2011. That gave Synageva some cash, a dying HIV drug called Fuzeon, and the ability to avoid the scrutiny that comes with an IPO. ... The current valuation of Synageva reminds me of that of [Protalix Biotherapeutics ]  right before they crushed their shareholders with an 80% below market dilutive financing in 2007. Food for thought.

If you want market-topping returns, you need to protect your portfolio from any undue risk. Luckily, we've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

The article Why Synageva Is Poised to Underperform originally appeared on Fool.com.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners