Efforts to find alternate uses for approved drugs is among the more creative and potentially valuable efforts in pharmaceutical research. A British Columbia outfit is among the active players in that field.

Aspreva Pharmaceuticals Corporation (NASDAQ: ASPV) uses a proprietary screening program to identify late stage and approved medicines that show potential for treating less common diseases. It then partners with the owners of those drugs to develop them for the new indications. The firm is currently conducting clinical trials to investigate the use of Hoffmann-La Roche's organ transplant drug CellCept in treating such autoimmune diseases as lupus nephritis and pemphigus vulgaris.

The company pleased investors last week, when it appointed J. William Freytag to be its new chairman and chief executive. Most recently, Freytag served as president, CEO and chairman of acquired biopharmaceutical firm Myogen.

ASPV shares popped on the news and have since been consolidating the gain in a bullish "flag" pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside. Note that Aspreva has since guided its Q2 revenue expectation to $63 million ($59.5M consensus) and announced that it will report Q2 results on August 1.

Analysts expect a 20% average annual growth rate, through the next five years. The ASPV P/E ratio (0.31), Price to Sales ratio (3.31), Price to Book ratio (2.17), Price to Cash Flow ratio (5.99), Price to Free Cash Flow ratio (5.32), Operating Margin (56.05%), Net Profit Margin (54.79%), Return on Assets (40.10%), Return on Investment (44.66%), Return on Equity (44.83%), Revenue per Employee ($1.63M) and Net Income per Employee ($891k) compare favorably with industry, sector and S&P 500 averages.

Institutions own about 60% of the outstanding shares. Over the past 52 weeks, the stock has traded between $16.60 and $27.89. A stop-loss of $17.25 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.