forbes: CV Therapeutics' Ranexa May Have Trouble Meeting Street Targets
Peter Kang, 03.02.06, 1:11 PM ET
Morgan Stanley reiterated an "underweight" rating on CV Therapeutics after the biotech firm reported a wider-than-expected loss for the fourth quarter.
CV Therapeutics (nasdaq: CVTX - news - people ) posted a loss of $1.65 per share on revenue of $3.4 million. A consensus of analysts expected a loss of $1.42 per share on revenue of $5.3 million.
The company said operating expenses rose 25% from the year-ago period, attributing the increase to the launch of a new indication for heart drug Aceon.
"Expectations for operating expenses are increasing, the bottom-line impact of Aceon royalties remains negligible, and we believe Ranexa will have a slow launch," said analyst Steven Harr of Morgan Stanley.
"The $30 to $50 per month co-pay combined with the drug's current data set leads us to believe this drug could have difficulty meeting long-term Street expectations."
The analyst widened the forecasted loss in 2006 to $5.87 per share from $4.98, and said the next catalyst for the stock will be expectations of favorable safety data for Ranexa from a trial known as Merlin. Results are expected by the first quarter of next year.
"Lack of Aceon contribution and expected slow uptake may put modest negative pressure on the stock in 2006," he said. "However, 12 to 18 month returns are more likely dependent on the Merlin outcome and their impact on sales, and we are not optimistic that this drug can be big enough to lead to meaningful profitability for this company."
Aceon has annual sales of less than $30 million compared with sales of $347 million for Altace, the leading angiotensin-converting enzyme inhibitor made by King Pharmaceuticals (nyse: KG - news - people ). Aceon is co-marketed with Belgium-based Solvay Pharmaceuticals, a unit of Solvay SA.
Elsewhere in the sector, Harr rates the following companies at "overweight": ImClone Systems (nasdaq: IMCL - news - people ), Onyx Pharmaceuticals (nasdaq: ONXX - news - people ) and Xenoport (nasdaq: XNPT - news - people ). |
