Thanks to the sale of a property last week, my bank account is what a good friend would say is as flush as it has been in recent memory. And holding plenty of cash right now is a blessing given the uncertain state of the markets and the economy.
I believe there will be plenty of good opportunities in the quarters ahead to deploy this new ammo at lower entry points in equities as well as in real estate. In addition, you can afford to be patient given 5% returns in money market funds and short-term Treasuries -- the first time those risk-free choices have paid that much in more than 15 years.
On the flip side, it is not a good thing to have a good slug of debt to deal with, especially if it must be refinanced in the near future. Unfortunately, shareholders of so many commercial REITs such as Vornado Realty Trust (VNO) have found that out since the Federal Reserve began its monetary tightening regime in March of last year. Needing to raise more funds in the biotech sector is not fun right now, either, as terms have become more onerous.
Rather than examine debt-burdened biotechs, I will provide updates on three of my favorite cash-rich biotech names. Let's start with a couple companies that are seeing their Covid-related revenue streams trickle down to zero but yet are awash in cash and are seeing great growth within their core businesses.
Fulgent Genetics (FLGT) saw its stock soar more than 15% last Friday after reporting better-than-expected first-quarter results and raising forward guidance. Fulgent's Covid testing sales are now down to a few million dollars a quarter after the company did nearly $2 billion in overall Covid testing sales during the pandemic. However, its core sales from other diagnostic tests soared about 150% on a year-over-year basis in the first quarter.
It is likely going to be a few years before Fulgent is profitable again. However, one can afford to wait. Fulgent ended the quarter with nearly $870 million of net cash on its balance sheet, meaning an investor is paying about 50% of core sales for the stock after subtracting that cash hoard from the equation.
Dynavax Technologies (DVAX) Is in the same boat. Contracts for supplying the adjuvant to Covid vaccine makers overseas have been fulfilled barring any new orders, which seems doubtful for the time being. However, this huge revenue stream over the past few quarters has allowed the company to build a $650 million cash hoard.
More importantly, it gave Dynavax the time to effectively launch Heplisav-B, which quickly has taken market share and is the best-of-breed product in the Hepatitis B space. This market should grow to $800 million annually in the U.S. alone by 2027. Heplisav-B has garnered more than 35% of the overall market and I expect it to surpass the 50% mark by 2024. Dynavax also has other potential candidates in development. Heplisav-B sales more than doubled in fiscal 2022 and the company expects them to rise 30% to 50% this fiscal year -- guidance that management confirmed last week.
Finally, we have Exelixis Inc. (EXEL) . The midcap oncology play recently agreed to use $500 million of its more than $2 billion cash hoard to buy back stock. Exelixis has agreed to support two members from an activist investment fund to its board, but the fund's management is pushing for a bigger presence as it seeks unlock additional shareholder value.
All three names have worked well for me as covered call holdings and I expect them to continue to do so even in an uncertain market environment.
