Pulse Check: Pharmaceuticals Roundup

by: Research Recap

As the fiercely competitive drug market continues to see billions of dollars of merger activity, Teva Pharmaceutical Industries (NYSE:TEVA) vows to grow its business quickly with acquisitions as soon as this year.

The Israeli generic-drug maker plans to triple its annual revenue in women’s health to $1 billion as early as 2012, betting on birth-control products. Teva CEO Shlomo Yanai told analysts that he’s got several targets in mind, but didn’t give any specific names, according to Bloomberg News.

Independent London-based analyst Frances Cloud said Teva could be targeting women’s health divisions of Merck & Co.(NYSE:MRK) Abbot Laboratories (NYSE:ABT). [A federal judge ordered Abbott to give prosecutors some of CEO Miles White's emails as part of a federal probe into whether the drugmaker improperly marketed its Depakote pill, which is used to treat bipolar disorder, seizures and migraines.] (Pharmalot)

Citigroup analyst John Boris raised his estimate of Teva’s 2010 adjusted earnings this week by a nickel to $4.55. That compares with what he said was the Wall Street consensus of $4.54 and Teva’s estimated range of $4.40 to $4.60. (Marketwatch)

Aside from growing its birth control products business, Teva also plans to expand its presence in oncology, and has signed a $334 million dollar deal with U.S. biotech firm Mersana Therapeutics for marketing rights to Mersana’s cancer drug XMT-1107.

Leader Capital Markets analyst Yoav Burgan said, “This is another milestone in Teva’s strategic plan to develop a pipeline of brand drugs. Teva’s primary objective is to reduce its dependence on Copaxone over time and to gradually change its business mix towards brand drugs.”

Burgan added that its an interesting step for Teva and has a “buy” rating on the company’s stock with a target price of $67. (Drugs.com)

Swiss drug-maker Roche Holding AG saw its shares rise this week after the company posted market beating first quarter sales figures on Wednesday.

Karl-Heinz Koch, analyst at Swiss broker Helvea said “The important message is that the underlying growth trend of key cancer drugs has been confirmed, which is important following the low sales in Q4 2009 on inventory reduction across the Roche group.”

Roche also plans to file for U.S. approval of its breast cancer medicine, T-DM1 this year. The news helped lift shares of ImmunoGen (NASDAQ:IMGN) as the drug uses cancer-killing agents from the U.S. company. (Reuters)

Morgan Joseph today reiterated a ‘Buy’ rating on ImmunoGen and raised its price target from $10 to $15. “We continue to encourage investors to Buy ImmunoGen shares at these levels and remain excited about ImmunoGen’s Tumor-Activated Prodrug (NYSE:TAP) technology’s ability to create the next-generation of therapeutic antibodies.”

Brean Murray Carret & Co. analyst Ling Wang maintains a “buy” rating on ImmunoGen’s stock with a 12-month target price of $14. (Benzinga)

Needham & Company maintains a “strong buy” rating on Par Pharmaceutical (NYSE:PRX) at a price target of $29. This comes after a U.S. district court ruled that a patent litigation case between Santarus (NASDAQ:SNTS) and Par regarding the acid reducer drug Zegerid was invalid.

Needham analysts said the development is an “underappreciated positive” for Par, as the company gets closer to adding a key product to its base generic business. (StreetInsider)

Zacks said the patent ruling was a “huge blow for Santarus, which was looking to protect Zegerid from generic competition. The company is entirely dependent on Zegerid for growth and the entry of generic versions of the product will be devastating for the company.”

Genzyme Corp (GENZ) could be worth as much as $93 a share, according to an analysis by Relational Investors LLC, the third largest Genzyme shareholder with 10.6 million shares at the end of 2009.

With its stock at around $53, Genzyme is still recovering from a manufacturing crisis that led to shortages of two of its main products. The company has just elected activist Ralph Whitworth to the board, according to Reuters. Whitworth, who runs Relational – the $6 billion investment firm, was chosen as Genzyme tries to prevent Carl Icahn from gaining too much control over the company.

According to Relational, Genzyme shares could be worth a lot more if it diversifies within the ultra-orphan disease market. Geoffrey Porges, analyst at Sanford Bernstein agrees. He said in a report in February that the firm could be worth $80 a share if it focused on drugs that treated rare medical conditions.

New data revealed at the annual American Academy of Neurology showed that Acorda Therapeutics‘ (NASDAQ:ACOR) drug, Ampyra, which was approved by the FDA in January, helped patients with multiple sclerosis. Over 37 percent of the patients in the study showed consistent improvement in their walking ability compared to close to 9 percent with a placebo.

Leerink Swann analyst Josh Shimmer expects Ampyra to gain 17% of the multiple sclerosis market at its peak, but is now questioning whether that estimate is low due to the widespread positive feedback among neurologists.(Minyanville)

According to JP Morgan equity derivatives strategist Marko Kolanovic and biotechnology analyst Cory Kasimov, investors should buy options of Dendreon Corp. (NASDAQ:DNDN) because the FDA is likely going to approve its prostate cancer therapy drug, Provenge, next month and boost the stock price to a record high.

“We remain very optimistic (90 percent probability) that Provenge will be approved on time,” the analysts wrote in a report. Kasimov recommended buying May $40 calls while selling May $50 calls, a strategy known as a call spread that cuts the price of the trade while capping potential profit.(BusinessWeek)

Citigroup analyst Lucy Lu thinks Dendreon shares are “priced to perfection.” She downgraded the company to Hold from Buy, but lifted the price target to $40.(Benzinga)

Sheena Lee