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Strategies & Market Trends : Joe Stocks Trader Talk

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To: Joe Stocks who wrote (485)	3/8/2002 4:22:11 PM
From: NCKEV	Read Replies (1) of 787

RESEARCH ALERT-Morgan Stanley cuts Sepracor target NEW YORK, March 8 (Reuters) - Morgan Stanley on Friday said it cut its 12-month target price on Sepracor Inc. <SEPR.O> to $27 from $63, one day after the biotech company's latest allergy drug was rejected by the Food and Drug Administration. Analyst Marc Goodman said in a research note that the FDA's issuance of a "not approvable" letter on the drug Soltara was "a big surprise to the investment community." The news led to a sharp sell-off in Sepracor shares, which closed at $19.64 on Thursday. "We are maintaining our 'Outperform-V' rating but are revising our (earnings estimates) to reflect the most conservative scenario," Goodman said. Goodman narrowed his 2002 loss forecast to $4.14 per share from $5.15, reflecting lower marketing expenses for Soltara, and widened his 2003 loss forecast to $2.92 from $2.63. Goodman said he is now forecasting a 2004 loss at Sepracor instead of a profit. On Thursday, Sepracor shares lost half of their value after the FDA cited concerns that Soltara could cause heart irregularities. The drug was aimed at challenging top-selling Claritin in the prescription antihistamine market. "We believe the majority of the sell-off was a rational response by investors to the negative news," Goodman said. "However, as is typically the case in these types of situations, we also believe the stock quickly moved into an 'oversold' position." Goodman said investors have overlooked the strong performance from Sepracor's asthma drug Xopenex and the potential of other drugs remaining in the company's pipeline. 12:00 03-08-02

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