Ranexa Won't Treat Heart Attacks, CV Therapeutics Falls 24%

While CV Therapeutics' Ranexa or Ranolazine trials proved that there is no greater risk of arrhythmia or abnormal heart beats, it didn't prove Ranexa's utility in treating acute heart disease or heart attacks, as opposed to chronic angina for which it is currently used. The news sent shares down 23.58% to $9.40 yesterday, erasing $172 million in value. That Ranexa poses no risk to arrhythmia will help sales for chronic angina -- analysts felt the label warning had dampened sales. The trials may also help Ranexa be approved for first line chronic angina treatments -- it's currently used when other treatments have failed. Lehman Bros. analyst Jim Birchenough said that implied a $40 share target, while Piper Jaffray analyst Thomas Wei said Ranexa could be a possible diabetes drug. Merrill Lynch analyst Thomas Chiu rated CVTX Neutral saying it needs more marketers to help sales, and a partner to offset costs. Deutsche Bank analyst Jennifer Chao downgraded CVTX to Hold with an $8 price target.

Sources: CV Therapeutics Press Release, Bloomberg , San Francisco Business Times, Forbes
Commentary: CV Therapeutics Trial Results: Enough To Drive Profitability? • Will MERLIN Work Magic For CV Therapeutics? • CV Therapeutics: Last Chance for a Tax Loss
Stocks to watch: CV Therapeutics (CVTX). Competitors: Vertex Pharmaceuticals (VRTX), PDL Biopharma (PDLI), Genentech (DNA). . ETFs: SPDR Pharmacueticals (XPH), iShares Dow Jones U.S. Pharmaceuticals (IHE), PowerShares Dynamic Pharmaceuticals (PJP)

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