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Sell Bellus Health Shares to $1

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surf1944   Wednesday, 05/07/08 04:59:46 PM
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Sell Bellus Health Shares to $1
Wednesday May 7, 2:41 pm ET
By Jason Napodano, CFA

Bellus Health, Inc. (NasdaqGM: BLUS - News) is a biopharmaceutical company focused on the development and commercialization of products for the treatment of neurological disorders. The company currently has two candidates under various stages of clinical development.

However, late-stage pipeline setbacks have sent the companyâ€s shares plunging. In July 2007, the FDA issued a second 'approvable' letter for Kiacta, requesting an additional trial and additional pharmacokinetic data. This was followed by negative results from the North American phase III trial of the companyâ€s biggest potential product, Alzhemed.

The FDA indicated that an additional trial with a p-value of 0.05, along with further pharmacokinetic studies, will be required before the agency approves Kiacta. This was followed by negative results from the Alzhemed trial in August 2007. The share price plummeted over 40% on the news.

To add to Bellus†woes, the cash position is a matter of grave concern. With such late-stage pipeline setbacks, the company intends to fund operations for the remainder of 2008 with $43.4 million in cash.

The rest of the pipeline looks lackluster and does not hold much promise. Given the significant lack of positive catalysts, we rate the shares a Sell with a target price of $1.

Arpita Dutt, CA, contributed to this report.


surf's up......crikey



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