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Updated:Trade Call Opinion: $TSRX For a Bounce Back Over $8

Today TSRX bounced off about $7.50 again, which has proven to be a solid level of support.  On the below 60 minute, 20-day chart we can see that it is setting up to make a move to back around $8.00 a share.  From its previous move on May 10, the stock has flagged down to about the 50% Fibonacci retrace level and the other indicators are showing a bullish move may be coming.  The MACD is about to cross, which is a buy signal.  Additionally, the Relative Strength Index and Money Flow Index are both on the lower end of the scale and are ticking up.

 

TSRX

The company announced On May 13th, 2013, that it has received a Notice of Allowance from the U.S. Patent and Trademark Office (USPTO) on an application related to its tedizolid phosphate patent portfolio. This newly allowed patent application protects a therapeutic combination of the experimental medicine tedizolid phosphate with a currently available antibiotic daptomycin. Data show that together, the medicines can uniquely prevent the development of daptomycin non-susceptible bacterial strains such as methicillin-resistant Staphylococcusaureus (MRSA).

As detailed in the patent application, tedizolid phosphate, at concentrations substantially below its current therapeutic dose to treat skin infections, unexpectedly prevents the formation of daptomycin resistant mutants of Staphylococcus aureus. Tedizolid appears to be unique in this mutant prevention activity given that seven other medicines tested, including linezolid, the only other drug of the same class as tedizolid, failed to show the same mutant prevention activity.

"MRSA bacteremia is a potentially fatal disease with limited treatment options," said Ralph Corey, M.D. Professor of Medicine and Infectious Diseases at Duke University. "As a clinician who treats bacteremia patients, I am concerned by the growing resistance to one of our last effective treatment options, daptomycin, and welcome this news that tedizolid phosphate may prevent daptomycin resistance when used in a combination therapy."

Tedizolid is on track for approval in mid-2014. MSRA has become a hot topic serious issue as of late, so we expect TSRX to be a big runner in the months ahead.

Balance Sheet
Total Cash (mrq): 83.65M
Total Cash Per Share (mrq): 1.75
Total Debt (mrq): 0.00
Total Debt/Equity (mrq): N/A
Current Ratio (mrq): 5.05
Book Value Per Share (mrq): 1.51
Cash Flow Statement
Operating Cash Flow (ttm): -52.72M
Levered Free Cash Flow (ttm): -29.16M

Lots of cash on hand at $83M, and company is burning $13M a quarter, which gives them plenty of head room. Lately, there  has been the usual "buy-out" talk associated with the company. This is likely due to the unmet need here and strong cash position of the company.

Team Stock Matusow  very short term price target opinion of $8.00, 3 month target of $10, one year target of $17.

 

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