What is The Medicines Co Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, The Medicines Co's Probability of Financial Distress (%) is 0.00%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of The Medicines Co's Probability of Financial Distress (%)
For the Drug Manufacturers - Specialty & Generic subindustry, The Medicines Co's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
The Medicines Co's Probability of Financial Distress (%) Distribution in the Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, The Medicines Co's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where The Medicines Co's Probability of Financial Distress (%) falls into.
The Medicines Co Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | 0.00 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.00% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
The Medicines Co (The Medicines Co) Business Description
Traded in Other Exchanges
N/A
Address
8 Sylvan Way, Parsippany, NJ, USA, 07054
The Medicines Company is a pharmaceutical firm that provides products to the U.S. hospital market. The company's primary commercial product, Angiomax, is an anticoagulant drug used in conjunction with aspirin for patients undergoing angioplasty. Medicines recently commercialized a new drug, Cleviprex, which is designed to control blood pressure in intensive-care settings.
Executives
| Alexander J Denner |
director |
C/O SARISSA CAPITAL MANAGEMENT LP, 660 STEAMBOAT ROAD, 3RD FLOOR, GREENWICH CT 06830 |
| Peter Wijngaard |
officer: Chief Development Officer |
8 SYLVAN WAY, PARSIPPANY NJ 07054 |
| Paris Panayiotopoulos |
director |
ARIAD PHARMACEUTICALS, INC., 26 LANDSDOWNE STREET, CAMBRIDGE MA 02139 |
| Geno J Germano |
director |
5 GIRALDA FARMS, MADISON NJ 07940 |
| Sarah J. Schlesinger |
director |
C/O ARIAD PHARMACEUTICALS, 26 LANDSDOWNE STREET, CAMBRIDGE MA 02139 |
| Christopher T Cox |
officer: EVP & Chief Corp. Dev. Officer |
CADWALADER, WICKERSHAM & TAFT LLP, ONE WORLD FINANCIAL CENTER, NEW YORK NY 10281 |
| Fredric N Eshelman |
director, officer: Executive Chairman |
PPD INC, 929 NORTH FRONT STREET, WILMINGTON NC 28401 |
| Armin M Kessler |
director |
|
| Robert J Hugin |
director |
C/O THE MEDICINES CO, 8 CAMPUS DR, PARSIPPANY NJ 07054 |
| Hiroaki Shigeta |
director |
THE MEDICINES COMPANY, 8 SYLVAN WAY, PARSIPPANY NJ 07054 |
| Stuart A Kingsley |
officer: President and COO |
152 CHESTNUT STREET, WEST NEWTON MA 02465 |
| Robert G. Savage |
director |
C/O EPICEPT CORPORATION, 777 OLD SAW MILL ROAD, TARRYTOWN NY 10591 |
| Glenn Sblendorio |
director, officer: President & CFO |
3 TIMES SQAURE, 12TH FLOOR, NEW YORK NY 10036 |
| James E Flynn |
10 percent owner, other: Possible Members of 10% Group |
780 THIRD AVENUE, 37TH FLOOR, NEW YORK NY 10017 |
| Deerfield Management Company, L.p. (series C) |
10 percent owner, other: Possible Members of 10% Group |
345 PARK AVENUE SOUTH, 12TH FLOOR, NEW YORK NY 10010 |
The Medicines Co (The Medicines Co) Headlines
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