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IDIX - Opposing analyst reactions to IDX-184 news

http://finance.yahoo.com/news/Idenix-shares-fall-following-apf-1741498012.html?x=0&.v=2

Idenix Pharmaceuticals shares fall after 2nd-quarter report, analyst concern on financing

NEW YORK (AP) -- Shares of Idenix Pharmaceuticals Inc. plunged Tuesday after the biotechnology company reported a wider-than-expected second-quarter loss and one analyst said financing issues could weaken its position in partnership discussions.

The stock shed $1.19, or 23.9 percent, to reach $3.80 in afternoon trading. Shares have traded between $1.86 and $10.10 over the past 52 weeks.

Late Monday, the Cambridge, Mass.-based company said it lost 28 cents per share during the quarter, wider than Wall Street's forecast of 25 cents per share. Revenue of $2.4 million also fell short of analysts' $3.4 million forecast.

The company receives its revenue through partnerships. Its lead hepatitis C drug candidate IDX-184 recently passed a midstage "proof-of-concept" study. Positive results from the three-day study will prompt the company to move the drug into later stages of development and several analysts believe that Novartis AG will exercise a partnership option on the experimental drug by the end of the year.

JMP Securities analyst Liisa Bayko, though, downgraded shares to "Market Perform" from "Market Overweight" Tuesday, citing the company's financing position. The company had $51.7 million in cash, cash equivalents and marketable securities as of June 30 and said it expects to have funding for operations through at least the first quarter of 2010.

Bayko said she had hoped to see more of an antiviral effect in the recent study, but the results indicate a greater effect at higher doses. That could lead to Novartis exercising their option on the drug by year end, she added.

"However, with cash sufficient only until the first quarter of 2010, we believe Idenix could be in a weak position going into negotiations with Novartis and will likely need to engage in a dilutive financing in the near term to bolster its position," she said in a note to investors.

Meanwhile, Caris & Co. analyst David Moskowitz reaffirmed a "Buy" rating on the stock and expects shares to reach $16 over the next 52 weeks. He said IDX-184's safety profile and better potency than a prior drug candidate will prompt Novartis to opt into the drug's development. That could result in an upfront payment of $25 million, he said, along with development funding.