MGI Pharma MOGN New patents, anti cancer Message Board

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Biotech / Medical : MGI Pharma MOGN New patents, anti cancer

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From: tom pope	10/17/2005 1:31:14 PM
	of 1826

From Merrill Company Update; Aquavan Data Could Provide Long-Term Growth Visibility FAVORABLE RISK/REWARD: We expect MGI to provide new data in 4Q05 from a study evaluating Aquavan as an agent for moderate sedation in colonoscopy. The data could help better define the market opportunity for Aquavan, and provide long-term growth visibility after Dacogen. We estimate that Aloxi is worth $19 per share and believe Dacogen should provide the next leg of growth. Thus we believe the risk/reward for MOGN is favorable. Reiterate BUY. DATA COULD HELP ELUCIDATE DRUG’S POTENTIAL: MGI is conducting a dosing study comparing Aquavan to midazolam as an agent for moderate sedation in patients undergoing colonoscopy. The study started in July and should be completed shortly with data available in 4Q05. We expect the study to identify a safe dose to take into phase III trials, which should begin in 2006. Combined with data from prior studies, investors should be able to better evaluate the drug’s market potential. POTENTIAL DIFFERENTIATION: Product differentiation will be crucial for MGI. If data for Aquavan can demonstrate a better product profile such that acute care centers can improve throughput and reduce expenses then the drug could justify its significantly higher price vs. existing drugs. In this case, we project peak sales for Aquavan of more than $200 MM. Key differentiating features could include rapid onset of action with a quick recovery from sedation, clear headedness upon recovery, no burning on injection, no titration issues, and no need for monitored anesthesiology care. ALOXI REMAINS A RISK BUT ALREADY IN STOCK: While Aloxi sales have disappointed recently due to slow market growth, we believe the stock already reflects risk associated with the drug. Assuming peak sales of just $300 MM, we estimate that Aloxi is worth ~$19 per share. Eric J. Ende Price: $21.17 Price Objective $28.00 Price Objective Date 28-Sep-2005 Estimates (Dec) 2004A 2005E 2006E EPS: $0.27 $0.19 $0.94 P/E: 78.4x 111.4x 22.5x GAAP EPS: -$1.23 -$0.71 $0.94 GAAP P/E: NM NM 22.5x EPS Change (YoY): -29.6% 394.7% Consensus EPS: $0.39 $1.07 Q3 EPS (Sep): -$0.09 $0.20 Mkt. Value / Shares Outstanding (mn) $1,608 / 76 Investment Rating Buy Volatility Risk Rating High Investment Opinion: C-1-9 Symbol/Exchange: MOGN / OTC

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