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Biotech / Medical : analysts and calls -- ML -- Ignore unavailable to you. Want to Upgrade?

To: tom pope who wrote (162)	9/2/2005 11:52:29 AM
From: tom pope	Respond to of 238

Cubist Pharmaceuticals Inc Company Update; ICAAC Postponed; More Anti-Infective Consolidation Possible ICAAC POSTPONED TO DECEMBER; LONG-TERM FUNDAMENTALS INTACT. Due to Hurricane Katrina, the ICAAC meeting, scheduled for September 21-24 in New Orleans and at which we expected dissemination of key secondary data points from the Phase III trial of Cubicin in staph infections of the heart and blood, was rescheduled until December 16-19 in Washington, DC. While the release of secondary endpoints may be delayed, the company indicated that supplementary NDA filing for Cubicin and peer-reviewed publication will NOT be delayed. Importantly our peak sales potential is intact and we reiterate our BUY. NVS BID FOR CHIR COULD SIGNAL MORE CONSOLIDATION; SYNERGIES FOR CUBIST. In separate news, Novartis proposed to acquire the portion of Chiron that they do not already own. Chiron owns the European rights to Cubicin. Based on comments made by Pfizer on its July 20 earnings call that it was in a competitive bid for Cubist’s competitor Vicuron and the possibility that the remaining suitors would still seek to expand their anti-infectives franchise, we believe that the acquisition of Chiron and European rights to Cubicin may lead to more consolidation in the anti-infective segment. Given Novartis’ acquisitive history, if Novartis ultimately acquires European rights to Cubicin, there would be obvious synergies for it to acquire US rights to the drug, potentially in the form of a corporate acquisition. However, such an acquisition may not occur for 6-12 months or may happen around the time of Cubicin label expansion to include staph infections of the heart and blood. EVALUATING ALL OPTIONS FOR DATA PRESENTATION. We believe Cubist is exploring a number of options, including data presentation at the Infectious Disease Society of America (IDSA) conference scheduled for October 6-9 to publish the Phase III data as soon as possible. The abstract deadline for IDSA, however, has passed. We believe it is possible that exceptions could be made, especially because of the importance of the Cubicin data. We expect the company to provide an update on its plans for data presentations next week. SALES ON TRACK TO MEET GUIDANCE. We project Cubicin sales are on track to meet guidance of $110-120 MM in sales in ‘05. Since April, the daily sales rate of Cubicin has risen 21%, including 5% MoM in July over June. We expect the sales rate to accelerate into the fall and winter. However, even if MoM daily sales growth remains constant at 5%, we project Cubicin will reach $110 MM in sales in ‘05. The delay of the ICAAC meeting does not affect Cubist’s fundamentals or peak sales potential. The key drivers to our peak sales estimate of $700 MM are sNDA submission and label expansion, which will not be delayed. David W. Munno