Why Avanir is Poised to Underperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, drug developer Avanir Pharmaceuticals has received a distressing two-star ranking.

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

Avanir facts

  

Headquarters (founded)

Aliso Viejo, Calif. (1988)

Market Cap

$428.3 million

Industry

Pharmaceuticals

Trailing-12-Month Revenue

$41.3 million

Management

CEO Keith Katkin (since 2007)

CFO Christine Ocampo (since 2008)

Return on Capital (average, past 3 years)

(66.7%)

Cash/Debt

$69.8 million / $28.9 million

Competitors

Bristol-Myers Squibb

Eli Lilly

GlaxoSmithKline


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

On CAPS, 26% of the 250 members who have rated Avanir believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star zzlangerhans, succinctly summed up the Avanir bear case for our community:

Nuedexta revenues have been increasing steadily, but not enough to justify a rebound from [$2.16 to $3.16] and a market cap of [$432M] despite an ongoing double digit quarterly burn and only [$70M] in the bank as of the end of Q3. I suspect traders are looking for positive news on Nuedexta from the [Committee for Medicinal Products for Human Use], but European approval is a notorious false start for companies with products that are already approved in the US. Other pipeline compounds remain in early clinical development.

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The article Why Avanir is Poised to Underperform originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

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