Biotech: Top 3 Analyst Picks

Includes: ELN, ITMN, PLX
by: Simon Monger

Elan Corporation plc (NYSE: ELN), Protalix BioTherapeutics Inc. (AMEX: PLX) and InterMune Inc. (NASDAQ: ITMN) are three top analyst stock picks made during today’s session.

Elan Upgraded and Seen as Potential Takeover Target

Elan Corporation (NYSE: ELN), a neuroscience-based biotechnology company, was upgraded to Outperform with a $10.00 per share price target by RBC Capital ahead of the opening bell. The analyst believes that the company’s Tysabri should beat expectations over the next few years, while it also suggested that the firm’s odds of becoming a takeover target have increased.

After falling significantly in 2008, Elan is now seeing an increasing number of investors come to the table, as evidenced by the large amount of call buying and recent surge in share price and volume. The stock has increased more than 30% year-to-date and more than 10% over the past five days alone.

Protalix Shares Should Move Higher with Many Catalysts

Protalix BioTherapeutics Inc. (AMEX: PLX), a biopharmaceutical company focused on recombinant therapeutic proteins, should move higher, according to Wells Fargo. After speaking with the company’s management, the analyst believes that the firm will benefit from another shortage of Genzyme’s (GENZ) Cerezyme and sees shares appreciating over the next year or so due to potential upcoming approvals.

Many analysts and investors are watching the biopharmaceutical company closely given the potential approval of its taliglucerase and various other pipeline improvements. However, the company’s recent move to sell four million shares of stock in a Spot Secondary priced at around $5.50 per share led to a mild sell-off that sent shares lower over the past couple weeks.

InterMune Raises Sales Estimates, Could be Buyout Target

InterMune Inc. (ITMN), a biotech company focused on developing and commercializing therapies in pulmonology and hepatology, could be a near-term potential acquisition target, according to Oppenheimer. After conducting checks with EU doctors, the analyst raised its price target to $58.00 per share and raised its peak EU sales estimate for Esbriet to $1.4 billion.

Many large pharmaceutical companies are seeking to fill voids in their own development pipelines through acquisitions of firms with proven drugs. As a result, companies like InterMune have been seen as takeover targets for some time, while companies like Gilead (NASDAQ:GILD) and Pfizer (NYSE:PFE) have been named as potential suitors for the highly successful biotech firm.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.