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Biotech / Medical : MGI Pharma MOGN New patents, anti cancer -- Ignore unavailable to you. Want to Upgrade?

To: tuck who wrote (1753)	4/19/2007 11:00:43 AM
From: tom pope	Respond to of 1826

Here's Aloxi guidance (from Merrill, not the company) Aloxi beats, Dacogen guidance raised MOGN beat 1Q07 estimates on higher revenues and lower expenses, in particular reporting 1Q07 Aloxi sales of $47.3 mn, above our estimate of $46.9 mn and consensus of $45.1 mn. MOGN has stopped quarter-end incentives for Aloxi, which will reduce quarter-end buying and result in a continued drawdown of inventories at the clinic level during 2Q. Thus, Aloxi sales are likely to decline in 2Q again as sales fail to reflect demand. But, Aloxi sales should rebound significantly in 3Q and 4Q as profit incentives drive the drug's use. Also, Dacogen guidance was raised to $95-$100mn vs previous guidance of $90-100 mn based on strong sales. However, based on a delayed rebound for Aloxi sales, we are lowering our estimates. Maintain BUY. Aloxi should rebound in 2H07 The profit incentive for Generic Zofran use will evaporate by mid-07 due to lower Medicare reimbursement levels, which should trigger a rebound in Aloxi sales in 2H07. Also, promotion for branded Zofran is decreasing due to generics, and may result in Aloxi further regaining market share. Therefore, MGI is reducing its quarter-end incentives for Aloxi which should smooth month-over month revenue. The net selling price (NSP) for Aloxi should also continue to rise during 2Q07 ($120 during 1Q07 vs $113 4Q06), giving physicians a profit incentive to use the drug relative to other drugs in the class. Dacogen strong, guidance raised Dacogen sales of $23.1 mn beat our estimate of $21.9 mn and consensus of $21.6 mn, with MGI raising 2007 guidance to $95-105 mn from $90-100 mn, signaling higher growth expectations for the drug. Dacogen received a specific J-code in January 2007, which may have boosted revenues. Survival data for Dacogen in MDS could also become available in 1H08, and could further drive sales of the drug. Delayed Aloxi recovery, revising estimates Based on Aloxi recovery expected to begin during 3Q vs. 2Q, we lowering our estimates. Our 2007 Aloxi estimate declines to $221 mn from $250 mn, non- GAAP EPS (ex-options) declines to $0.40 from $0.57 in 2007, to $0.82 from $0.92 in 2008, and to $0.97 from $1.10 in 2009.