The Medicines Company (MDCO), Merck & Co., Inc. (MRK), Baxter International Inc. (BAX): Three Reasons to Like This Critical Care Company

Recothrom competes with the FDA-approved Gelfoam Plus hemostasis kit from Baxter International Inc. (NYSE:BAX). The kit comprising of Pfizer’s Gelfoam and human thrombin from Baxter International Inc. (NYSE:BAX) is used to control bleeding during surgical procedures. Both companies have signed an agreement to market and manufacture the kit, and strong collaboration and positioning should boost sales growth. Baxter International Inc. (NYSE:BAX) had stable performance during the second quarter of 2013: Sales were up by 4%, and both adjusted net income and earnings were up as well.

Positive performance
The Medicines Company (NASDAQ:MDCO) has been showing outstanding performance for a small company. In the second quarter ended June 30, its net revenues were $172.8 million, an increase of 27% over the same period last year. The growth was due to increase in sales of its three marketed products.

Angiomax U.S. sales were up by 14% to $137.9 million, Recothrom U.S. sales were up $17.9 million, and Angiomax/Angiox sales outside of the U.S. were up by 11% to $13.2 million.

In every indicator of fundamental strength, the company excelled. Adjusted net income in the recent quarter was $29.2 million, up by 62% compared to $18 million last year, and adjusted EPS was $0.50, an increase of 56% from $0.32 in the same period in 2012.

The company also has a strong cash balance. As of June 30, cash balance was $292.9 million, compared to $519.4 million as of Dec. 30, 2012. This sort of free cash gives the company the flexibility to engage in growth activities.

Conclusion
The Medicines Company (NASDAQ:MDCO) has a comprehensive business plan to capture some of the anticoagulant and critical care markets. It has a slew of marketed products, its pipeline is well-differentiated, and it even has a collaborative agreement with larger players for developing and selling major products in areas like oral anticoagulants where it doesn’t yet have an exclusive product. The company has positioned itself well in the market as an anticoagulant product developer, and it has a strong cash position to back its activities up. Overall, I am convinced this is an important investment grade stock for a health care portfolio, with not too much long-term risk.

The article 3 Reasons to Like This Critical Care Company originally appeared on Fool.com and is written by Kanak Kanti, De.

Kanak Kanti De has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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