Monday, August 28, 2006

Calls of Note Part 2

- ThinkEquity comments on BioCryst Pharmaceuticals (NASDAQ:BCRX) saying that among the abstracts for the upcoming ICAAC meeting, workers from UT-Galveston are planning to present poster V-2041a, entitled, "Injectable Peramivir Promotes Survival in Mice and Ferrets Injected with Highly Pathogenic Avian Influenza A/Vietnam/1203/04 (H5N1)". The Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC), biotech's premier conference for anti-infective drugs, will be taking place September 27-30 in San Francisco.

Firm notes that while no abstract data is available on the ICAAC Web site, they believe the
positive nature of these in vivo results is clear from the presentation title. They note that the historic failure of Peramivir in Phase III trials has led many investors to believe that the molecule is not a potent antiviral agent, a notion which this data clearly rejects. Furthermore, this data fulfills half of the requirements for approval under the auspices of Bioshield II, allowing government stockpiling and use by the public in a pandemic scenario.

Reiterates BUY rating; firm values BCRX shares by applying an industry-average sales multiple of 6 and a 30% discount rate to 2012 Fodosine revenue estimate of $393M, and add $10 per share in Peramivir value to reach a one-year price target of $21 per share.

Notablecalls: May see a quick pop in BCRX.

- Goldman Sachs notes that following up on their downgrade note from Thursday (8/24) where they added Par Pharma (NYSE:PRX) to the America's Investment Sell List, firm's channel contacts have confirmed AstraZeneca to have Troprol XL product (25mg only) in Par's warehouse (consistent with investor speculation), implying Par as the likely choice of authorized generic (AG) should a generic launch take place (Sandoz currently has approval on the 25mg representing 24% of sales). Overall, the Toprol XL opportunity may support some near-term upside to estimates (pending better visibility into launch timing) but the firm believes this is likely, at least in part, already reflected in the recent run in shares (up 32% since July 7).

No change to outlook on shares or 12-month price target of $17.50 (based on implied P/E and EV/EBITDA multiples of 13.6X and 7.7X), and implies some modest downside potential over the next year.

Notablecalls: Not sure what to do with this one. I would risk 25c to see if this one has some further legs.

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