>>NEW YORK (AP) -- An analyst cut the investment ratings of Medarex Inc. Friday, saying the developer of antibodies to treat cancer and other diseases is not an attractive buyout target.
Medarex shares fell $1.10, or 7.3 percent, to close at $13.88 on the Nasdaq Stock Market.
"We view a buyout scenario as highly unlikely," Infinium Capital Corp. analyst Steven A.J. Salamon said in a note to investors Friday.
The company's shares have spiked since Abgenix Inc. agreed to be acquired last month by Amgen Inc. for $2.2 billion.
Salamon said Medarex, of Princeton, N.J., doesn't meet the criteria needed to make it into an attractive short-term or midterm buyout target.
He lowered his investment rating on the company's shares to "underperform" from "neutral."
Salamon noted that, while Medarex and Abgenix may have traded often in tandem, the similarities in valuation have become more tenuous in recent years.
The analyst left in place his 12-month price target of $12.50, contending that the current share price discounts any development risks associated with the company's Ipilimumab treatment for metastatic melanoma, which is in late-stage testing.
While he praised the product's potential as the most exciting emerging treatment for melanoma, he believes the company's goal of $700 million in worldwide sales by 2010 involves more development risk than the recent share price reflects.
Salamon also pointed to potential competition from a rival product from Pfizer Inc.
Separately, on Monday, Medarex and PharmAthene Inc.'s drug Valortim received fast-track designation from the Food and Drug Administration for the treatment of anthrax infections. A day later, the companies received a $2.05 million congressional appropriation for development of Valortim.<<
Cheers, Tuck |
