>>MGI Pharma Still A 'Solid Company' Despite Mixed Guidance
Kate DuBose Tomassi, 01.11.06, 11:34 AM ET
Banc of America Securities analyst David Maris lowered the price target on MGI Pharma (nasdaq: MOGN - news - people ) to $24 from $30 after the company pre-announced slightly lower-than-expected fourth-quarter sales of Aloxi, its post-chemotherapy nausea treatment, and Gliadel, a brain tumor treatment.
MGI provided “mixed guidance” for 2006, according to the research analyst.
For 2006, 2007 and 2008, Maris lowered his earnings-per-share estimates on MGI to 10 cents, 50 cents and 97 cents, respectively, from 51 cents, 90 cents and $1.35.
"Top-line guidance was fairly in-line with our estimates, [but] expense guidance diverged from our expectations,” said the research analyst. MGI's selling, general and administrative expenses of $140 million exceeded the analyst’s expectation of $120 million.
The analyst noted “minor creeping of timelines for [MGI's] pipeline.” In particular, MGI originally said it would file for Saforis, a cancer-related treatment, in the third quarter of 2005 but now predicts a filing in the second quarter of 2006.
"We continue to believe that with a full pipeline and a strong base of sales supported by Aloxi, MGI Pharma represents a solid company with great growth and good value at these levels,” the research analyst said.<<
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I'm pretty sure my option hedge of written Jan 17.5 calls is going to expire worthless, allowing me to keep that money. I'm tempted not to rehedge after that, as I can't think of what other bad news could occur, and . . . MGI might perhaps be a munch candidate. There's been a bit of insider buying near these levels.
Anyone else got a take or strategy here?
Cheers, Tuck |
