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Biotech / Medical : Santarus (SNTS) -- Ignore unavailable to you. Want to Upgrade?

To: bob zagorin who wrote (12)	3/31/2006 2:28:07 PM
From: bob zagorin	Respond to of 16

SmartMoney.com A Stomach for Biotechs By Lawrence Carrel March 31, 2006 Here's a weekly look at some small-capitalization stocks that are making big moves on Wall Street. WITH THE MAJOR SMALL-CAP INDEXES hitting record highs again this week, investors with a fondness for the little guys continued to enjoy portfolio gains. A handful of biotechnology companies, in particular, caught our eye. A promising longer-term play among this week's winners is Santarus (SNTS1), a biotech focused on developing treatments for gastrointestinal disorders. The San Diego company's stock price climbed 10% over four days to close Thursday at $6.88 thanks to a double dose of good news. On Monday, the Food and Drug Administration approved Zegerid chewable tablets. A proton pump inhibitor, Zegerid treats heartburn and other symptoms associated with gastroesophageal reflux disease. When the year started, Santarus's only regulatory approval was for a powdered form of Zegerid, which didn't sell well. But fortunes took a turn for the better on Feb. 27, when the FDA approved the drug in capsule form — which takes us to the second piece of big news. Zegerid capsules hit the market on Tuesday. With a new 370-person sales force at its disposal, Santarus is prepared to make a strong push for a share of the $12.8 billion market for proton pump inhibitors, though it faces deep-pocketed competition. There are already four big drug companies selling antacids, led by AstraZeneca's (AZN2) Nexium and TAP Pharmaceutical's Prevacid. TAP is a joint venture of Abbott Labs (ABT3) and Japan's Takeda Pharmaceutical. UBS analyst Annabel Samimy thinks the fact that Zegerid capsules are priced 23% less than Nexium will convince doctors and patients to give them a try. "We expect to see an uptick in prescriptions in the coming months," Samimy wrote in a research note published Tuesday. "[However], initial trends may be clouded by heavy sampling." She rates Santarus a Buy with a $10 price target. The stock is up 26% year-to-date. (UBS has had an investment-banking relationship with the company in the past three years.) For 2005, Santarus posted a net loss of $65.0 million, or $1.66 a share, on sales of $26.5 million. Samimy forecasts 2006 sales of $45 million. By 2008, she predicts revenues will grow to $132 million and losses will shrink to 30 cents a share. The company doesn't plan to market the chewable tablets this year, instead focusing on sales of the capsules......."