February 13, 2007

Bullish on CV Therapeutics

From Zack's:

Last Friday afternoon, a new research report came out on CV Therapeutics (CVTX) with a Buy recommendation on it. Excerpted from the report, written by Zacks senior pharmaceuticals analyst Jason Napodano, CFA, are some reasons behind the bullish viewpoint:

”Headquartered in Palo Alto, CA, CVTX is a biopharmaceutical company focused on applying molecular cardiology to the discovery, development and commercialization of novel, small molecule drugs for the treatment of cardiovascular diseases. Fourth quarter sales of Ranexa, launched in March 2006 for chronic angina, continue to move forward slowly. However, uptake will probably remain low until the MERLIN data becomes available at the American College of Cardiology [ACC] in March 2007.

“We continue to rate the shares a Buy based on our belief that MERLIN will be positive, and use in the first-line indication and acute coronary syndrome (ACS) will drive significant profitably in 2010. Our price target remains $17.

“Costs are high, but phase III trials on Ranexa and Regadenoson are complete. We expect R&D [research and development] expenses to decline by $30 million in 2007. Management estimates that 50% of the R&D spent in 2007 will still be on the Ranexa and Regadenoson programs to prepare the filings. We estimate that R&D expense will decline significantly in 2008, leading to sizable operating leverage as Ranexa ramps. CVT recorded a loss of $5.49 per share in 2006. We believe the company can be profitable in 2009.”

The Fool also has a write-up here
since it is a "Rule Breaker." They note that the outcome of the clinical trials are difficult to predict.

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