DNA
Early Data & Growth Update at Analyst Day:
DNA is holding an analyst day on Fri. We do not expect significant new data on
late-stage products but the potential of earlier stage products could come to the
forefront, such as the 2nd generation anti-CD20 antibody for rheumatoid arthritis.
Also, we expect DNA to raise its long-term growth projection (’06 – ’10) from 20%
to 25%, which would then be in-line with street consensus. Maintain Neutral.
Late-Stage Data to Be Released in ‘06:
We do not anticipate significant new clinical data for Avastin, Herceptin, Rituxan
or Tarceva to be released at the analyst day. But, we expect DNA to highlight key
’06 catalysts for Avastin, such as data in pancreatic cancer, kidney cancer and
use with Tarceva in 2nd line lung cancer. Also, it may highlight upcoming data for
Rituxan in multiple sclerosis (HERMES 2) and Lucentis data with less frequent
dosing (PIER study) for macular degeneration.
Phase II Data for Anti-CD20 May Be Released:
Because little new data on late-stage drugs will become available, we expect data
to be released on earlier stage drugs. The company may provide phase II data
on a humanized anti-CD20 antibody for rheumatoid arthritis, which if
commercialized would improve profitability because DNA would reduce the split of
profits it pays to Biogen IDEC.
May Increase Long-Term Growth Guidance to 25%:
We also expect management to update 2006 guidance as well as long-term
growth projections for 2006 – 2010. Prior guidance called for an average growth
rate of 20% per year between ’06 and ’10 but we expect the company to raise its
long-term growth guidance to 25%, which is in-line with Street Consensus, thus is
unlikely to boost the stock. |
