you gotta love murphy's timing. thanks for letting me pick up a few more on sale today.
Subj: Edison Research Associates Initiates Coverage of InSite...
Date: 7/15/99 1:03:50 PM Pacific Daylight Time
From: AOL News
BCC: BZSHADOW
Edison Research Associates Initiates Coverage of InSite Vision
EDISON, N.J., July 15 /PRNewswire/ -- Edison Research Associates announced today that it has initiated coverage of InSite Vision Incorporated (Amex: ISV), the global leader in ophthalmic genetics research, with a purchase recommendation directed at risk-oriented biotech investors and money managers.
In support of his recommendation Edison's analyst Warren Beck pointed to the strength and market readiness of InSite Vision's product pipeline of ophthalmology treatments.
"In the case of the diagnostic line the products are ready for market, which suggests that meaningful revenues will commence next year and operating earnings will become a factor in the following year," Beck said, focusing on ISV-900, the glaucoma diagnostic product.
The report points out that management expects to finalize soon a royalty-based marketing pact with a big pharmaceutical company for ISV-900, which is expected to reach the market next year.
"Since the magnitude of those royalty payments could reach the $100-million level in the out years, assuming a 20% royalty on $500 million in sales, investors are advised that the earnings potential in this situation is extraordinary," Beck said.
He added that the company's collaborators are reporting new breakthroughs on the TIGR gene and that InSite Vision is continuing to build on its already strong intellectual property position in the glaucoma genomics area.
In his report, Beck noted that earlier this year InSite licensed its glaucoma treatment ISV-205 to Pharmacia & Upjohn (PNU), emphasizing that PNU is the dominant producer of therapeutic drugs for treating glaucoma.
The partnering has already produced positive developments. "Recently, management reported that early Phase II clinical results on ISV-205 indicate a positive safety profile and that the data was showing a 75% reduction in the patients suffering from elevated levels of intraocular pressure," Beck said.
While noting that the therapeutics line is at least 3-5 years from a revenue producing product, Beck said, "...it is likely that the speculative potential of the program will grow in the interim, particularly as big pharma companies enter into licensing deals and research collaborations involving the products."
Beck concludes, "Our analysis suggests that InSite common shares might be properly valued at the 10-level, assuming orderly progress to licensure for the diagnostics line." He explained that this is predicated on a net present valuation of the company's two principal research projects of $200 million.
In sum, even though risks remain, Beck said, "it appears that the shares of InSite Vision are rather deeply undervalued."
Edison Research Associates of Edison, New Jersey is a Registered Investment Advisor.
SOURCE Edison Research Associates; InSite Vision Incorporated
CO: Edison Research Associates; InSite Vision Incorporated; Pharmacia & Upjohn
ST: New Jersey
IN: MTC
SU: |
