| Immunex (IMNX) 17.25 +1.03: Shares of Immunex are getting a lift today on the heels of the company's analyst meeting held yesterday. Among the meeting's highlights, the company announced positive results for its flagship drug Enbrel -- most impressive were the positive preliminary results in its phase II clinical study of psoriasis patients. After six months of treatment, approximately half the patients receiving Enbrel achieved an improvement of 75% or better compared to 5% improvement for patients on placebo. The phase II study was designed to investigate the safety of and response to Enbrel in psoriasis, following promising clinical results in patients with psoriatic arthritis, a related condition. The data in psoriatic arthritis have already been filed with the FDA for review. In addition, management said the drug has generated favorable results in studies of ankylosing spondylitis and Wegener's granulomatosis. Among the biggest challenges facing Immunex are manufacturing capacity constraints. The company is building out manufacturing capacity with an eye towards producing $5-$6 billion of Enbrel by 2006 -- the idea is to increase supply steadily between now and then. This is consistent with its goal of $4 billion in Enbrel sales by 2005. As a frame of reference, Enbrel sales are expected in the range of $0.9-$1.3 billion for fiscal 2001. Assuming IMNX reaches its 2005 Enbrel sales goal of $4 billion, the company could expect to pull down roughly $2.00 per share to the bottom line. Assigning the industry valuation multiple of 30x earnings suggests a four-year target of $60 per share should be attainable. The shares have been in the process of bottoming since March when they hit a 52-week closing low of 11.62. For the past three months, IMNX has essentially ranged between 14.00 and 18.00. In light of the company's solid fundamentals, improving (though early stage) pipeline, and relatively stable chart we continue to believe IMNX carries an attractive longer-term risk/reward profile. -- Michael Ashbaugh, Briefing.com |
