Stock on Watch: Zogenix, Inc. (ZGNX)

Company Profile:

Zogenix, Inc., a pharmaceutical company, develops and commercializes therapies for the treatment of central nervous system disorders in the United States. The companys lead product candidate is the ZX008, a low-dose fenfluramine for the treatment of seizures associated with Dravet syndrome. It also develops Relday, an injectable formulation of risperidone that is in Phase III clinical trial to treat the symptoms of schizophrenia and bipolar disorder in adults and teenagers with 13 years of age and older. In addition, Zogenix, Inc. provides contract manufacturing services. The company was formerly known as SJ2 Therapeutics, Inc. and changed its name to Zogenix, Inc. in August 2006. Zogenix, Inc. was founded in 2006 and is headquartered in San Diego, California.

Recent News:

Zogenix Inc. (ZGNX) reported a loss of $8.8 million in its fourth quarter. It had a loss of 36 cents per share. Losses, adjusted to account for discontinued operations, came to 48 cents per share. The results beat Wall Street expectations.

Investigational New Drug (IND) Application for the Phase 3 program for ZX008 for the treatment of Dravet syndrome, a rare and debilitating form of epilepsy that begins in infancy, accepted by the U.S. Food and Drug Administration (FDA).

Announced new data demonstrating sustained effectiveness and cardiovascular-related safety in a new cohort of 7 Dravet syndrome patients who began add-on treatment with ZX008 at various starting points between 2010 and 2014.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

ZGNX’s strengths can be seen in its strong profitability compared with its peers. Technical indicators signal the bullish signs, as there is a bullish cross in MACD. RSI is in bull territory, which stands at 45.38. The current P/E ratio indicates it is undervalued compared to the average P/E ratio of the industry and the sector. We rate Zogenix, Inc. (ZGNX) a BUY.