Pharmaceutical companies are always risky propositions. So much depends on drugs in the pipeline, FDA approvals, patents in effect, and things going well when the medicines are prescribed to the public at large. But they can also be profitable when you've invested at the right time, right place. I think it is the right time, right place when it comes to Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ). Jazz has figured out a model that is a bit less risky. Rather than trying to find the next big drug for something that other drug companies are also seeking cures for (think Alzheimer's or breast cancer), it focuses on those neurological and psychological needs that may be less high profile, yet are unmet by other medicines.

The FDA is nearing final approval of its lead compound, Luvox CR, which was developed by Jazz to treat obsessive compulsive disorder (OCD) and social anxiety disorder (SAD), two prevalent psychological disorders, and is expected to be released in 2008. In a July 11 research report, Lehman Brothers said, "We view Luvox CR as an attractive commercial opportunity for Jazz owing to the combination of: (1) a large, addressable patient population; (2) compelling clinical data including once-daily dosing; (3) a highly concentrated target physician audience; and (4) an absence of promoted brand products against which it will compete."

The latter point is the biggest one for me: Jazz is treading where other companies have not, and as a result, they will have a lock on a very viable landscape. Lehman Brothers expects Luvox CR sales to hit $170 million in 2011, and $230 million by 2015. If they are on target, and I believe they are, we will see Jazz increase significantly in value in the coming years, this upcoming year in particular, when Luvox CR is expected to hit the marketplace.