Hello there, MS Chief Pharmaceutical Officer Chris here. I am elated to share something we have been working diligently on: an objective score to help evaluate biotechnology company. As the first of several objective scores to be released, our new Financial Health Score is designed to specifically measure the financial health of developing biotechnology companies. As I looked around at other scoring systems or ranks, I was constantly confronted with the realization that these scores were not applicable to biotechnology. How and why should the same score be used to assess the financial health of developing mid-cap biotechnology companies as mega-cap technology companies? They should not! This is why we diligently created this proprietary measure of health. Our proprietary score incorporates important considerations for clinical stage biotechnology companies such as cash runway, debt, and current cash position, among other inputs relevant to developing biotechnology companies.
Our scale ranges from negative five up to a score of twenty-four. Interpretation is as follows:
- Score of -5 to 5 [D]: The lowest tier on our financial score. These companies have a concerning financial situation which warrants careful evaluation of risks.
- Score of 5.1 to 10 [C]: Companies in this tier have an average financial score. Companies are not expected to be as high risk as those with lower scores, but have characteristics that warrant careful evaluation.
- Score of 10.2 to 15 [B]: These companies have very favorable financial scores. There is limited concern from a financial standpoint.
- Score of 15.1 to 24 [A]: These companies are the cream of the crop from a financial standpoint based on our proprietary score. There is a strong financial set-up for these companies to develop their clinical assets.
Here is the MS Financial Score for several of our favorite biotechnology plays:
- RegenXBio (RGNX): 17.9 [A]
- Calithera (CALA): 13.3 [B]
- Adma Biologics (ADMA): 7.5 [C]
- TG Therapeutics (TGTX): 3.1 [D]
This is not a recommendation to buy or sell any security. Members of the MS team hold stock in the aforementioned stocks and reserve the right to buy or sell securities at anytime.
MS Money Move and its Chief Operating Officer who is a scientist and individual investor, as well as its affiliates are not registered financial advisors. Our posts should serve as educational material to help you conduct due diligence research. Posts and articles are not directives or recommendations to invest in any security. We reserve the right to buy or sell any security for ourselves without any notification except when required by law. We are not responsible for the action of our affiliates. Investment theses may change due to the variable nature of the securities market. Because of this there is great risk when investing in stocks and options which can result is capital loss. Additionally, past performance by MS Money Moves or any security is not a predictor of future performance. Everyone should conduct their own research and due diligence before making an investment decision. We recommend you consult a financial advisor regarding any investment action.
The biotech sector is especially volatile. Stock prices may fluctuate substantially based on material or nonmaterial developments. We encourage everyone to familiarize themselves with clinical trial processes, relevant terminology, FDA/SEC rules and regulations, and the general processes of drug & therapy development/approval. Always do independent research in a security prior to investing.