This is a summary of what Merrill had to say about a month ago. I'll reproduce the full text if any one is interested
• Amending income statement model. Our estimates
have been revised following Sanofi-Aventis’s (SNY,
N) expansion of the oncology program, termination of
the IL-1 Trap program in rheumatoid arthritis, and
restructuring to conserve cash.
• Restructuring to conserve cash. REGN's
restructuring included staff reductions of 23%, and a
projected year-end cash balance of $285-$295 mm.
While management expects current cash balances to
be sufficient until mid-2008, we have conservatively
included an equity financing of $200mm in 2006E.
• Neutral rating unchanged. Our income statement
model only allocates modest placeholder revenues for
VEGF Trap in oncology, due to lack of significant
clinical data, and clinical/regulatory timelines.
However, substantially higher upside potential exists
pending appropriate data disclosure. In order to
provide some context, we have provided a) Avastin’s
approved and pending indications; b) ML estimates
for Avastin revenues; and c) sensitivity analysis if
VEGF Trap timelines were to be accelerated. We will
review our investment rating pending further visibility
on the development of VEGF Trap in oncology and
AMD, IL-1 Trap in osteoarthritis and new niche
indications, clarity on timelines to regulatory filing,
and progress on the company’s management of cash reserves. |
