Thursday, February 15, 2007

Calls of Note Part 2

Morgan Stanley out on Nektar Therapeutics (NASDAQ:NKTR), saying that Despite the expanded Exubera launch to the GP community, January prescription trends do not in any way reflect the much anticipated "inflection" point. For 2007, firm is cutting their forecast in half for Exubera and additionally bringing down 2008 because they believe that it will be almost impossible for the drug to hit firm's previous targets based on current trends. For now, firm is maintaining their peak Exubera forecast of $800 million, which drives their fair value of $12; however, they see further downside risk to this. To help investors follow Exubera scripts, firm is initiating a monthly tracker that will look at where scripts are versus where they would need to be to hit forecasts.

Script data for Exubera following the GP launch have remained weak with January TRxs coming in at 4,336 (compared to December 2006 TRxs of
3,500). While firm recognizes that they only have one month's data following the GP launch and that prescriptions could pick up sharply, especially following the DTC campaign anticipated in 2H this year, they are reducing our 2007 Exubera forecasts to $156 million from $300 million. As a result, firm's EPS estimates for 2007 and 2008 have been reduced to $(1.26) and $(0.73) from $(1.18) and $(0.64) respectively. To reach their 2007 estimates will require 831,000 scripts to be dispensed in 2007 in the US (in addition to EU sales, which they estimate to be 30% of US sales). Firm notes that according to their tracker, even to hit their new target prescriptions in the US might prove a challenge for Exubera.

Firm maintains Underweight rating.

Notablecalls: Must feel for NKTR shareholders as the Exubera launch has been really painful. I've been looking for any signs of pickup in Exubera for quite some time, but doesn't look like there will be any change in the n-t.

No comments: