Pru cut apparently not based on anything new at the company, or change in judgment. Application of different definitions for ratings. The unfortunate Pru retail accounts may never own another BT with lead product in PI or PII. OTOH, Pru may be the first firm that means HOLD when they say it. **May**, may not.
NEW YORK, May 29 (Reuters) - Prudential Securities downgraded five development-stage biotech companies and upgraded another after reevaluating its ratings in accord with company-wide rating system changes.
The downgraded biotechs include Ista Pharmaceuticals Inc. (ISTA - news) and ViroLogic Inc. (VLGC - news), which were dropped to hold from strong buy, citing capital risks.
Corvas International Inc. (CVAS - news) and Texas Biotechnology Corp. (TXB - news) were also lowered to hold from strong buy, due to clinical development remaining in a quiet period.
Triangle Pharmaceuticals Inc. (VIRS - news) also went to a hold, citing valuation and commercial risk.
Analyst John Sonnier said the four fundamental risks for these companies are management/infrastructure, technical, regulatory, and capital risk.
Sonnier said seven of the firm's former strong buy-rated stocks were given the firm's now-highest buy ratings; including Amylin Pharmaceuticals Inc. (Nasdaq:AMLN - news), Cerus Corp. (Nasdaq:CERS - news), Guilford Pharmaceuticals Inc. (Nasdaq:GLFD - news), Insmed Inc. (Nasdaq:INSM - news), Pozen Inc. (Nasdaq:POZN - news), Scios Inc. (Nasdaq:SCIO - news), and Trimeris Inc. (Nasdaq:TRMS - news). Neose Technologies (Nasdaq:NTEC - news) was upgraded to buy from hold. |
