Are GlaxoSmithKline plc, Tissue Regenix Group plc and Optibiotix Health plc must-have health stocks?

Top FTSE 100 pharmaceuticals group GlaxoSmithKline (LSE: GSK) may have endured a challenging few years, but it remains a core stock for a portfolio in my view.

Attractive buy

The company has come through a phase of expiring patents, which has temporarily reined-in revenue and profits, but ageing populations in the developed world and rising demand in emerging markets remain long-term drivers for growth. Glaxo is well positioned to benefit, with its four divisions of pharmaceuticals, consumer health products, vaccines and HIV medicines.

The company is set to put the recent lacklustre period behind it with a return to revenue growth this year. City analysts forecast an earnings rise of 15%, and this is expected to be just the start of a new growth trajectory. As such, Glaxo appears an attractive buy at a current share price of 1,436p on a price-to-earnings ratio of 16.4 and with a dividend yield of 5.6%.

Commersialisation underway

Tissue Regenix (LSE: TRX) has a patented technology that decellurises animal and human tissue, leaving a “tissue scaffold which is not rejected by the patient’s body and can then be used to repair diseased or worn out body parts”.

In its annual results released this morning, the company reported revenue of £0.8m in the first year of commercialisation of its flagship wound care product, and good clinical progress on orthopaedic and heart-valve products. Revenue is set to rise rapidly, with analysts having pencilled-in uplifts to over £3m, followed by over £10m.

As expected, Tissue Regenix reported a £10m pre-tax loss for the year just gone, reflecting its investment in commercial infrastructure and clinical trials. However, with year-end cash of £19.9m and rising revenues, the financial position of the company is strong.

With the shares modestly lower in early trading, Tissue Regenix is valued at £131m. However, the size of the regenerative medical devices market is huge and with the commercial potential of the company’s products starting to be realised, the business could come to be worth a multiple of its present value. As such, it could prove a good buy for investors looking for a higher risk/higher reward opportunity.

A speculative investment

Optibiotix Health (LSE: OPTI) is behind Tissue Regenix on the road to commercialisation, but like the regenerative tissue company, it has genuine and valuable intellectual property. In Optibiotix’s case, this is centred on tackling obesity, high cholesterol and diabetes with patented compounds that change the way microbes in the body work and interact.

Optibiotix may have no commercial revenues at this stage, but a number of joint development, cost-sharing and option agreements are in place, including with Slimfast and an unnamed “multinational consumer goods company”.

At a current share price of 80p, Optibiotix is valued at £62m. At this stage of its development, Optibiotix remains a speculative investment for those with a high tolerance for risk, but big business is clearly interested in the company’s technology and the potential markets are huge. These markets were further extend just last week when Optibiotix filed a new patent for microbial proteins with the potential to tackle hospital superbugs such as MRSA.

Optibiotix is a young company at a relatively early stage of development, but the growth prospects for even some established profit-making small caps can be missed on occasions, because this area of the market is under-researched by professional analysts.

The Motley Fool's analysts have just unearthed what they believe is a grossly mis-priced smaller company. The company in question is in an industry where small margin improvements can make a huge difference to the bottom line. And our experts see good reasons why this particular business could be set to do exactly that.

You can read their research on this under-the-radar growth opportunity in a FREE report, 1 Top Small-Cap Stock From The Motley Fool. Simply CLICK HERE for your copy.

G A Chester has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.