Navidea Biopharmaceuticals (NAVB) May Double in 2013

Finally, we have Navidea’s remaining diagnostic studies, including AZD4694, which is a late-stage radiopharmaceutical candidate that it in-licensed from AstraZeneca plc (NYSE:AZN) in 2011. AZD4694 binds to beta-amyloid deposits in the brain, which then show up in positron emission tomography scans and help in diagnosing Alzheimer’s disease. Alzheimer’s is largely a gray area in terms of research, so this diagnostic test could be a significant revenue generator down the road.

Focusing on the present, I’m not oblivious to the fact that heavy dilution due to cash burn does threaten to sack shareholder value. In fact, even if Lymphoseek is approved, it’s very unlikely that Navidea would turn a profit within the first year of production. On the flip side, if research firm Ladenburg Thalmann’s peak sales projection of approximately $450 million is accurate, then I’d estimate that annual sales of $110 million should be enough to turn Navidea profitable on Lymphoseek sales alone. By my estimates, this means a potential annual profit by as early as 2015, even with further R&D ongoing.

As you might imagine, the next big date is the PDUFA for Lymphoseek on April 30. Assuming it’s addressed all of its manufacturing obligations, Navidea could be off to the races in 2013. Whether it’s one, two, or three times the charm for Navidea, I like its prospects enough to enter a CAPScall of outperform on this small-cap biopharmaceutical company.

The article This Diagnostic Company May Double in 2013 originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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