1st alb: CVTX :Raising Price Target to $35 on Early Stop of ASCOT Clinica
December 16, 2004
David Webber, Managing Director
CV Therapeutics, Inc. (CVTX - $ 22.27)
Buy
Raising Price Target to $35 on Early Stop of ASCOT Clinical Trial
Target Price $35.00
Current Price $22.27
52 Wk High: $22.81
52 Wk Low: $11.28
30-Day Avg Daily Vol: 847,213
Market Capitalization: $708.2M
Shares Outstanding: 31.8M
Cash: $400.9M
Cash/Share: $12.61
Debt/Capital: 62.55%
Book Value: $93.16M
Book Value/Share: $2.93
Net cash / share = $4.51
We are reiterating our Buy rating, based on a decision by the steering committee of the ASCOT (Anglo-Scandinavian Cardiac Outcomes Trial) clinical trial to stop the trial due to significant benefits observed in the Aceon-Norvasc treatment arm.
Key Points:
* We are reiterating our Buy rating, based on a decision by the steering committee of the ASCOT (Anglo-Scandinavian CardiacOutcomes Trial) clinical trial to stop the trial due to significant benefits observed in the Aceon-Norvasc treatment arm.
* The antihypertensive arm of ASCOT compared the ability of Norvasc plus Aceon versus Atenolol plus Naturetin to reduce a composite endpoint of nonfatal myocardial infarction and fatal coronary heart disease in 19,342 hypertensive patients.
* Although data from this trial have not yet been released, this announcement will provide increased exposure for Aceon, helping the co-promotion team of CV Therapeutics and Solvay Pharmaceuticals to increase Aceon sales from 2003 figures of $34.6 million toward our 2009 estimated sales target of $150 million.
* On Monday, a supplemental NDA was submitted seeking to expand the Aceon label to include treatment for reduction of cardiovascular mortality, nonfatal myocardial infarction and resuscitated cardiac arrest in a broad population of patients.
Based on these events, we are raising our estimates for U.S. sales of Aceon to $150 million in 2009 from $75 million.
* As a result, our 2005 EPS estimate remains unchanged, however our 2006-09 estimates rise to ($4.22), ($1.65), $0.53, and $2.09 from ($4.77), ($2.20), ($0.33) and $1.38, respectively.
* We are raising our price target to $35 from $29, based on estimated 2009 EPS of $2.09, a 40 P/E, and a 22.5% risk discount factor.
Valuation: Our new price target is $35, based on estimated 2009 EPS of $2.09, a 40 P/E, and a 22.5% risk discount factor.
Company Description: CV Therapeutics is developing pharmaceuticals to treat cardiovascular disease. The company's lead product, Ranexa for chronic angina, is in Phase III studies, with the ERICA trial fully enrolled and the MERLIN trial ongoing. Regadenoson (CVT-3146) is in Phase III testing as a pharmacologic stress agent for use in cardiac imaging studies. |
