Biovail 'Still Not Getting the Attention It Deserves' - UBS

Biovail Corp.'s (BVF) latest rights acquisition is right on strategy, but whether it proves profitable will likely remain unknown for some time to come, says UBS analyst Marc Goodman.

On Monday, Biovail entered into an agreement with Acadia Pharmaceuticals Inc. (ACAD), to co-develop Acadia's experimental drug for Parkinson's disease psychosis (PDP) and Alzheimer's disease psychosis (ADP) in the United States and Canada. Acadia will receive an upfront $30-million cash payment from Biovail and is entitled to receive milestone payments totaling more than $300-million.

Mr. Goodman said in a note to clients:

[The deal] fits into the company’s strategic focus of niche [central nervous system] drugs with strong [intellectual property]. The Phase II data is encouraging but we still view Phase III success as risky and thus will risk adjust our forecasts materially for now.

While the drug could potentially lead to sales of C$250-million, the analyst is only willing at this stage to add C$30-million in revenue to his 2013 estimates based on the inherent risk involved in bringing drugs from trial to market.

In the interim, Mr. Chamoun remains bullish on Biovail shares, saying concerns about a near term dividend cut are overblown.

"We believe that BVF is still not getting the attention that it deserves," he wrote, maintaining his "buy" rating and $14 price target.

Comments

[YoYoMama]

Just cut divy to 9 cents a share. BVF will come down. Better deal at a lower price.

2009 May 06 08:50 AM

[Clearlead]

it's getting murdered today

2009 May 06 02:24 PM