Monday, March 26, 2007

Calls of Note Part 5

- Deutsche Bank is downgrading CV Therapeutics (NASDAQ:CVTX) to Sell from Hold ahead of full Ranexa Merlin PIII data to be presented at the American College of Cardiology (ACC)
on Tues, 3/27.

Firm now believes Ranexa ACC data will fall short of generating sufficient positive data trends for supporting Ranexa's outlook even as an approved niche chronic angina agent. Failure to achieve Merlin's efficacy endpoint (orig disclosed 3/6) of composite CV-related death, 1st occurrence of MI or recurrent ischemia and potential lack of clear positive trends on secondary endpoints would be expected to have an adverse impact on current Ranexa sales trends. Ranexa's comparable safety profile v standard of care is not enough to make Ranexa's profile compelling on a reward/risk analysis in their view. DB is lowering 2007-10 Ranexa sales projections to $48M, $58M, and $68M, and $78M, respectively.

As a result of Ranexa's diminished outlook they believe it may be difficult for CVTX to raise additional capital in order to support high operational expenses supporting Ranexa sales and expect increasing pressure on CVTX's ability to remain solvent.

Firm's new $2 PT is based on 2x 08 Ranexa sales of $58M and 58M s.o. CVTX currently has ~$270M or $4-5 cash/shr assuming 1Q07 burn, to be reduced as a function of operating expenses and the firm notes the $399.5M in convertible debt.

Notablecalls: Think the tgt cut will generate some jitters today.

1 comment:

MikeT said...

Absolutely BS downgrade given the "embargoed" MERLIN Abstract published accidentally on the ACC site due out tomorrow.

Clearly the drug, has a significant effect on recurrent ischemia and is safe. And with results of the most widely anticipated studdy, COURAGE, results due out tomorrow, this stock can move pretty hard.