Canada markets closed
  • S&P/TSX

    18,861.36
    -217.28 (-1.14%)
     
  • S&P 500

    3,785.38
    -33.45 (-0.88%)
     
  • DOW

    30,775.43
    -253.88 (-0.82%)
     
  • CAD/USD

    0.7741
    -0.0027 (-0.35%)
     
  • CRUDE OIL

    106.03
    +0.27 (+0.26%)
     
  • BTC-CAD

    25,409.75
    +302.53 (+1.20%)
     
  • CMC Crypto 200

    423.28
    -8.19 (-1.90%)
     
  • GOLD FUTURES

    1,793.50
    -13.80 (-0.76%)
     
  • RUSSELL 2000

    1,707.99
    -11.38 (-0.66%)
     
  • 10-Yr Bond

    2.9720
    0.0000 (0.00%)
     
  • NASDAQ

    11,028.74
    -149.16 (-1.33%)
     
  • VOLATILITY

    28.93
    +0.77 (+2.73%)
     
  • FTSE

    7,163.90
    -5.38 (-0.08%)
     
  • NIKKEI 225

    25,935.62
    -457.42 (-1.73%)
     
  • CAD/EUR

    0.7401
    -0.0007 (-0.09%)
     

Is Bellus Health Stock Still a Buy After 30% Earnings Jump?

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
Biotech stocks can be good yet risky investments.
Biotech stocks can be good yet risky investments.

Written by Amy Legate-Wolfe at The Motley Fool Canada

Shares of Bellus Health (TSX:BLU) jumped an astounding 30% last week after the chronic-cough therapy company reported strong earnings. Once a steal, Bellus stock is now back to near 52-week highs. So is this biotech stock still a buy?

What happened with Bellus Health

During the first quarter, management reported they would have an end-of-phase 2 meeting with the Federal Drug Administration in June 2022. This could allow Bellus to enter the third phase in the second half of 2022.

The second phase allowed the company to showcase the effectiveness of its SOOTHE trial. Its BLU-5937 remedy improved the severity and quality of life for those with chronic cough.

Bellus remained in a solid cash position with US$234 million on hand. It announced a net loss of US$14.4 million compared with a loss of US$15.8 million the year before — the improvement was thanks to lower costs surrounding research and development for BLU-5937.

So what?

It’s not just that Bellus is improving its financial position; it’s also getting closer to getting BLU-5937 to market. Chronic cough affects millions of Americans, and the company is also meeting with European agencies to get them on board as well.

Obtaining FDA approval is an enormous milestone for any biotech company. Once a product is approved in the U.S., it allows other countries to fast-track their approvals, which would lead to an enormous increase in revenue for the company.

Now what

A few things. First, management is set to discuss the results of its trials during a thoratic conference in late May. Then of course there is the meeting with the FDA to look forward to in June. Both will allow investors some insight into when we can expect BLU-5937 to come to market.

Meanwhile, analysts remain solidly behind Bellus stock. In particular, they see a high likelihood of the company being able to expand the product on a global scale. Some analysts noted the company will be able to take on an increased market share of up to 32%. Therefore, the company continues to see an increase in its target price.

Bottom line

Bellus looks to be in a strong financial position, with potentially less than a year before its BLU-5937 is available for purchase. With FDA approval, the company would be able to expand rapidly. So even at around $11 per share, investors should watch for more boosts in the future.

The post Is Bellus Health Stock Still a Buy After 30% Earnings Jump? appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Bellus Health Inc.?

Before you consider Bellus Health Inc., we think you’ll want to hear this.

Our nearly S&P/TSX market doubling* Stock Advisor Canada team just released their top 10 starter stocks for 2022 that we believe could supercharge any portfolio.

Want to see if Bellus Health Inc. made our list? Get started with Stock Advisor Canada today to receive all 10 of our starter stocks, a fully stocked treasure trove of industry reports, two brand-new stock recommendations every month, and much more.

See the 10 Stocks * Returns as of 4/14/22

More reading

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

2022

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting