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Biotech / Medical : Millennium Pharmaceuticals, Inc. (MLNM)
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From: Icebrg1/9/2007 5:43:56 PM
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Banc of America analyst David Witzke was less enthusiastic about Cambridge, Mass.-based Millennium Pharmaceuticals (nasdaq: MLNM - news - people ). Last week, on Jan. 4, the company said it forecasted a loss of $60 million to $90 million for fiscal 2007. The company expects 2007 earnings of $10 million to $20 million, excluding items.

Millennium said it estimates raking in somewhere between $240 million to $260 million in 2007 on U.S. sales of its drug Velcade, a treatment for relapsed multiple myeloma. The company will receive royalties between $140 million and $150 million.

Witzke argued that he thinks U.S sales in 2007 for Velcade could prove challenging because of competition from Celgene’s Revlimid, but he maintained an estimate of $245 million.

“We note that fourth quarter 2006 Velcade sales of approximately $55 million have been flat-to-down for the past three quarters and the company needs to achieve $20 million to $40 million in additional Velcade sales above the fourth quarter 2006 run rate of $220 million,” he wrote.

The company’s stock is up 7% over the past 12 months, Witzke noted, due to positive restructuring announcements and acquisition speculation.

“However, with some acquisition premium already built into MLNM’s valuation,” the analyst wrote, “we believe it is unlikely that MLNM will outperform in 2007.”

He reiterated a “sell” rating on the stock.
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