Xenoport (f/k/a XNPT)

[DAD2]

Credit Suisse places outperform rating with $7.00 price target.



We are Initiating Coverage of XenoPort with an Outperform Rating and
$7 Target Price. Despite a number of fundamental concerns, at its current
valuation ($219mn market cap/$165mn y/e EV) and with low expectations
for its marketed products and pipeline, we think relatively little has to go right
for the stock price to appreciate. Specifically we see 3 main upside
optionality triggers which are not factored into our numbers/valuation (a)
delivery of greater Regnite/Horizant revenues – either via high end-user
sales and/or US re-partnering (b) monetization of clinical assets, in particular
XP23829 or (c) the company seeks strategic alternatives.