Why Healthcare Stocks Lexicon, Profound & Mind Medicine Are Booming?

Summary

• Lexicon Pharmaceuticals stock soared over 40 per cent on its successful third phase trial for sotagliflozin on November 17.
• Stocks of Profound Medical Corp have gained over 155 per cent since the COVID-19 pandemic led market crash on March 24.
• Mind Medicine’s stocks have zoomed over 1810 per cent year-to-date.

Healthcare companies are witnessing a rise amid COVID-19 circumstances this year. The Toronto Stock Exchange Healthcare Index has surged almost 16 per cent in the last one month. Healthcare stocks are trading high over the last couple of months as investors go bullish on this sector. These stocks include a wider swath of medical companies ranging from drug makers to pharmacy and medical instrument manufacturers. We will take a quick look at the following three trending stocks: Lexicon Pharmaceuticals Inc (NYSE: LXRX, LXRX: US), Profound Medical Corp (TSX: PRN, PRN: US), and Mind Medicine (NASDAQ: MMEDF, NEO: MMED).

Lexicon Pharmaceuticals Inc (NYSE:LXRX)

Current Stock Price: US$ 1.81

Drugmaker Lexicon Pharmaceuticals Inc announced successful completion of third phase trial of its heart failure drug sotagliflozin on November 16, recording positive results from soloist and scored studies. The drug reduced hospitalizations for heart failure and urgent heart failure visits in patients treated with sotagliflozin as compared with placebo. The stock soared over 40 per cent on this update.

Lexicon stock has soared over 23 per cent in the last one month. However, it posts a decline of 56 per cent year-to-date. Its current market capitalization stands at C$ 212 million.

The drugmaker’s profit-to-book (P/B) ratio is 2.413, and the price-to-cashflow (P/CF) ratio is 1.30. Its debt to equity (D/E) ratio is 0.24. The stock offers a negative return on equity (ROE) and assets, as per the TMX website.

The pharmaceuticals’ 10-day average stock trading volume is 10.82 million units.

The biopharmaceutical company reported research and development expenses of US$ 40.1 million for the three months ended September 30, 2020, compared to US$ 26.7 million in Q3 2019, mainly due to increases in external clinical expansion costs related to sotagliflozin following the separation with Sanofi.

Profound Medical Corp (TSX: PRN; NASDAQ: PROF)

Current Stock Price: C$ 25.40

Profound Medical Corp offers incision-free therapies that include actual Magnetic Resonance (MR) imaging, thermal ultrasound, and closed-loop temperature feedback control for the radiation-free ablation of diseased tissue. The medical technology company provides therapy to ablate the prostate gland in cancer patients.

The medical stock has increased over 13 per cent in the last one month. The scrips swelled over 72 per cent year-to-date.

Stocks of Profound Medical Corp have gained over 155 per cent since the COVID-19 pandemic led market crash on March 24.

Its current market capitalization stands at C$ 493 million.

The medical stock’s profit-to-book (P/B) ratio is 4.006 and the debt to equity ratio is 0.02. The stock delivers a negative return on equity (ROE) and assets, as per the TMX website.

In the third quarter ended September 30, 2020, it reported revenue of C$ 2.98 million from sales and services. The third quarter 2020 revenue soared by nearly 337 per cent from C$ 682,224 in Q3 2019.

The company registered a net loss of C$ 0.43 per common share in Q3 2020, compared to a net loss of C$ 0.57 per common share, for Q3 2019. The increase in net loss was primarily attributed to an increase in research and development (“R&D”) costs of $1.325 million, offset by a surge in gross profits of C$ 1.674 million.

Mind Medicine Inc. (NASDAQ:MMEDF)

Current Stock Price: US$ 1.07

Mind Medicine Inc engages in researching, manufacturing, and deploying psychedelic drugs to improve health and wellness.

The neuro-pharmaceutical company has recently received a positive result on its protocol design for a Phase 2a clinical trial testing micro-dose of LSD in the medication of adult ADHD from the Swiss and Dutch health agencies.

The drugmaker’s stock zoomed over 1810 per cent this year. The stocks soared over 174 per cent in the last six months and increased by almost 17 per cent in the last one month.

Mind Medicine’s 10-day average stock trading volume is 2.87 million units.

Its current market capitalization stands at US$ 374 million. Mind Medicine delivers a negative return on equity (ROE) and assets, as per the TMX website.

The psychedelic medicine biotech company recorded total assets of US$ 23.7 million as of September 30, 2020, including the liquidity of US$ 18.2 million.

Mind Medicine posted a net and comprehensive loss of US$ 8.6 million for Q3 2020 and US$ 21.4 million for the nine months ended September 30, 2020.

After a round of financing in October, the company registered cash reserves of US$ 37.8 to enable sustained progress of its clinical experimental pipeline of psychedelic inspired drugs and trail therapies.