Wednesday, December 20, 2006

Calls of Note Part 3

- Citigroup is out positive on Human Genonme Sci (NASDAQ:HGSI) after VaxGen announced today that the Department of Health and Human Services (HHS) has terminated the company's contract to provide 75 million doses of a modern anthrax vaccine for civilian biodefense.

Today's setback for VaxGen could lead to additional contracts being awarded to Human Genome Sciences, in firm's view. Firm recalls that HGS is already producing 20,000 doses of ABThrax to deliver to the U.S. government for the national strategic stockpile by late 2008.

They believe that HHS might opt to enter into additional contract in the 2007/08 timeframe with HGS. Given the attractive margins of such a contract, this could be an important new cash flow source to HGS and could reduce further the likelihood for additional financing in the future
for the company.

Reits Buy and $19 tgt.

Notablecalls: Expect to see buy interest in HGSI today as Citi's call make sense.

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