Biotech Values

[drbio45]

ency from Rodman

CHMP Renders Positive Opinion on Thelin This morning the EMEA
> announced that the Committee for Medicinal Products for Human Use
> (CHMP) adopted positive opinions on initial marketing authorization
> applications for Thelin. Based on this opinion we expect the EMEA to
> approve Thelin for marketing in the European Union within the next 90
> days.
> Positive Repercussions for Thelin Approval by the US FDA in Our
> Opinion A positive CHMP opinion indicates to us that the safety issues
> with Thelin noted by the FDA may not be that serious. We are more
> inclined to think now that the management's recent response to the
> approvable letter from the FDA may be sufficient and that they may not
> need to conduct another clinical study.
> ENHANCED THELIN MARKETING POSITION Given that an additional clinical
> trial may not be needed to address the observations and concerns cited
> by the FDA in the approvable letter issued on Thelin NDA earlier this
> year, we now believe Thelin is more likely to be approved ahead of
> ambrisentan (1H07 vs. 2H07). As a reminder, Myogen (MYOG, Not Rated)
> previously disclosed it will not file for approval until 4Q06.
> THELIN PRESENTS a $200 MM OPPORTUNITY With the reduced regulatory
> hurdle, we now expect Thelin to enter U.S. market in 1H07, ahead of
> ambrisentan. We expect Thelin to achieve peak sales of $200 MM in
> 2012. We believe that while Ambrisentan will be the best-in-class ERA
> for the treatment of PAH, recent data at ATS and convenience of dosing
> suggest to us that Thelin should be able to garner a significant
> market share in the PAH market. It is noteworthy that Thelin has been
> shown to be effective in treating Tracleer failing patients.
> Upgrade to Market Outperform ENCY shares have traded down
> significantly since receiving the FDA approvable letter earlier this
> year. Despite the pre-market run-up we would be buyers of the stock at
> the open. The CHMP opinion signals to us that safety concerns
> associated with Thelin may not be as difficult to address as we
> originally thought of. We therefore upgrade ENCY shares to Market
> Outperform with a 12-month price target of 10 is based on applying a
> 35x to our 2010 EPS estimate of $0.61 discounted annually by 25% for
> 3.5 years.
> KEY RISK FDA request for an additional trial for Thelin approval
>
>
> <<ENCY Note CHMP positive opinion Final.pdf>>
>
>
> Navdeep S. Jaikaria, Ph.D.
> Managing Director
> Senior Biotechnology Analyst
> <http://www.rodmanandrenshaw.com/>
> Tel:: [phone]
> Fax:: [phone]