Can You Double Your Money With ProMetic Life Sciences Inc.?

ProMetic Life Sciences Inc. (TSX:PLI) has a great pipeline of impressive drugs. Could this be your ticket to huge profits in 2017?

The Motley Fool

What stomach-churning roller-coaster ride it has been for ProMetic Life Sciences Inc. (TSX:PLI). The stock fell as low as 55% last year before rebounding by an impressive 49.4% in the latter part of December. There’s no question that the stock is riding huge upward momentum heading into the new year, but can it last?

Prometic Life Sciences is a Canadian pharmaceutical company that specializes in small molecule therapeutics and protein technology. The company is developing therapies in the field of fibrosis, autoimmune disease, and cancer. The company has a fantastic R&D and a nice pipeline of drugs that are set to go under clinical trials over the next few years.

It’s no mystery that Canada has been a graveyard for healthcare stocks. Two of the biggest Canadian healthcare names went down over the last two years, and the average Canadian investor must be avoiding the sector like the plague.

The infamous Canadian companies Valeant Pharmaceuticals Intl Inc. and Concordia International Corp. have both lost over 90% of their value over the past few years due to scandals. So why should you even consider another Canadian healthcare play?

Prometic Life Sciences is not another corrupt, price-gouging roll-up firm. The company actually has a legitimate R&D division and some very promising therapies that are being worked on right now. Innovation is alive and well at the company, as new first-to-market drugs are expected to be churned out over the next few years. If the drugs in the company’s pipeline prove to be successful during their clinical trials, then we could see top-line revenues soar along with the stock price.

The management team is doing what it can to minimize risk by making clinical trials short and inexpensive. This means that no time will be wasted if a therapy is not working very well, so resources can be used to for a completely different therapy. These limited clinical trial expenses result in higher efficiencies, which gives the company the ability to maximize potential reward while reducing the risk of overspending.

The company currently has two of its drugs in Phase Three clinical trials and several more in their Phase Two trials. This means that the quite a few drugs passed their Phase One clinical trials and have shown enough promise for further research. If a drug can pass its Phase Three clinical trial, then we could have a blockbuster drug that could raise the company’s profits into the stratosphere.

It’s nearly impossible to tell if a drug will pass a clinical trial. The company just has to keep its pipeline full of great drugs and hope that some of them show promise. Because of this, the stock is a speculative bet and should only be held by investors who can stomach a large amount of volatility. There’s no question that there are huge risks associated with this investment, but the potential rewards could be astronomical.

The management team is doing a great job of managing costs, and I like the pipeline right now. All it takes is one drug to pass its clinical trials, and the stock could easily double overnight. If you feel like taking a risk, then Prometic Life Sciences could be your best bet.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any stocks mentioned. Tom Gardner owns shares of Valeant Pharmaceuticals. The Motley Fool owns shares of Valeant Pharmaceuticals.

More on Investing

Canadian Dollars
Stock Market

Where to Invest $5,000 in April 2024

Do you have some extra cash to spare? Here are five companies to invest $5,000 in next month.

Read more »

Plane on runway, aircraft
Stocks for Beginners

Up 53% From its 52-Week Low, Is Cargojet Stock Still a Buy?

Cargojet (TSX:CJT) stock is up a whopping 53%, nearing closer to 52-week highs from 52-week lows, so what's next for…

Read more »

Question marks in a pile
Bank Stocks

Should You Buy Canadian Western Bank for its 4.8% Dividend Yield?

Down 35% from all-time highs, Canadian Western Bank offers a tasty dividend yield of 4.8%. Is the TSX bank stock…

Read more »

Gold bars
Metals and Mining Stocks

Why Alamos Gold Jumped 7% on Wednesday

Alamos (TSX:AGI) stock and Argonaut Gold (TSX:AR) surged after the companies announced a friendly acquisition for $325 million.

Read more »

tsx today
Stock Market

TSX Today: Why Record-Breaking Rally Could Extend on Thursday, March 28

The main TSX index closed above the 22,000 level for the first time yesterday and remains on track to post…

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »