These Three Healthcare Cos. Could Inject New Life Into an Ailing Portfolio
All of these names easily beat quarterly expectations; here's how I'm playing them.
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In my column on Monday, I profiled a couple of biotech names that had knee-jerk pull backs in response to second-quarter results and where I had added to my exposure to those stocks on lower entry points. In today’s column, I will highlight several of my healthcare names that posted much better than expected Q2 numbers and whose stocks moved higher on the news. I am waiting for 5% to 10% pullbacks in these names in the next market decline, to add more to these positions.
Let’s start with Supernus Pharmaceuticals SUPN. In June, the biopharma did what I wish a lot of the industry would do more around -- especially with the biopharma/biotech lagging the overall market badly for over a half of a decade. Supernus took its cash hoard and made a strategic acquisition to enhance its product portfolio and pipeline. Supernus purchased Sage Therapeutics in mid-June.
Sage’s drug for postpartum depression, which is partnered with Biogen BIIB, is a great fit for the company’s existing sales force and portfolio. Management believes the acquisition will yield some $200 million in annual cost savings given the large overlap between the two firms. Last week, Supernus easily beat top and bottom-line expectations with its Q2 numbers. Management then boosted fiscal 2025 guidance significantly as it integrates the recent Sage buyout. The stock has moved up some 25% since the deal was announced and the stock trades around $41 a share. If we get a pullback in the high $30s, I will add to my stake in SUPN.
Mirum Pharmaceuticals MIRM is a mid-cap biopharma company I mentioned several times this year. The company delivered blowout second-quarter results last week. The quarterly net loss was roughly one third that was expected. Revenues vastly exceeded the consensus as well. Net product sales from Mirum’s franchise drug Livmarli rose more than 85% on a year-over-year basis. Mirum has a couple of quite intriguing candidates it is advancing its pipeline as well. Based on recent results, Mirum looks like it will be profitable by fiscal 2028, up from a previous estimate of fiscal 2029. Mirum also would make a logical buyout target. The shares have sprinted forward to the $65 level. If the equity moves back down closer to $60, I will add to my stake in MIRM
Finally, we have CorMedix, Inc. CRMD, another healthcare company I have profiled a few times in 2025. This small-cap stock easily stepped over earnings and revenue estimates with its Q2 numbers last week. Sales traction from its recently launched antimicrobial catheter lock solution DefenCath continues to exceed all initial expectations. Sales guidance at the end of the first quarter was for between $23 million to $31 million in sales in the second quarter. Management then took that up to $35 million to $40 million at the end of June. Second-quarter numbers came in at the top end of that upwardly revised range. CorMedix is already nicely profitable, and the shares go for less than eight-times forward earnings. I added to my stake in CRMD following quarterly earnings and will add more on any decent pullback. This is another name that would make a great purchase by a larger medical device company.
At the time of publication, Jensen was long CRMD MIRM, SUPN.
