CVTX - CV Therapeutics, Inc. Message Board

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Biotech / Medical : CVTX - CV Therapeutics, Inc.

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From: mopgcw	2/28/2009 1:28:21 PM
	of 411

citi: 20 February 2009 - 8 pages CV Therapeutics Inc (CVTX) Estimate Q4 Earnings Miss Bottom Line but Lexiscan a Silver Lining change Y * Conclusion(s) - Today, CVT announced GAAP Q408 earnings with Ranexa sales slightly lower that are offset by higher Lexiscan royalty. EPS loss was ($0.60) vs. Citi ($0.53) and consensus ($0.32). CVT management remains steadfastly against the Astellas offer and has again rejected its proposal for $16 per share. In our view, Ranexa's current growth trajectory is falling below expectations but Lexiscan is a bright spot. The best option, in our view, would be to negotiate a higher bid from Astellas given that the bid is attractive and given that we are not impressed with Ranexa's trajectory. * Ranexa Sales - Ranexa sales ($31.5M; +4% q/q vs. Citi $32M vs. consensus $33M) were lower than consensus, possibly due to no wholesaler stocking in Q408 (9% scrip growth vs. 8% wholesale shipment growth). The 5% price increase in Q1 will help, but Ranexa's sales growth must accelerate to reach our ~$173M in '09 sales. * Expenses - CVT announced higher Q408 R&D expense at $22M (Citi $20M) and lower SG&A at $41M (Citi $45M). * Lexiscan Upside - Management stated that Lexiscan could capture 50% of market share (~$200M of Adenoscan's $400M sales) with potential peak sales of $500M globally (i.e. $100M ex-US). We now model $63M royalties in '09 and $100M by '12 inclusive of both Lexiscan royalty and amortization of TPG-Axon upfront payment. Recall that CVT receives ~10% royalty rate for North American sales (50% sold to TGP-Axon) and owns 100% Lexiscan rights outside US. * Estimate Changes - We have updated '09-'12 Ranexa sales estimates as well as increased Lexiscan royalties as noted above. Our new GAAP EPS ests for 2009E-'12E are ($0.75), $0.19, $0.69 and $1.61 from ($1.33), ($0.54), $0.14 and $0.66 respectively. We now show CVT being profitable in 2010 vs. 2011 previously.

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