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http://biotuesdays.com/2011/03/08/roth-starts-biodel-at-buy/

Roth starts Biodel at buy

March 8, 2011 by leonardzehr · Leave a Comment
Roth Capital Partners has initiated coverage of Biodel (NASDAQ:BIOD) with a “buy” rating and 12-month price target of $4, saying the shares “appear undervalued” and “there may be meaningful upside” to the price target. The stock closed at $1.95 on Monday.
Biodel is developing a second generation version of Linjeta, a fast-acting formulation of insulin, after the FDA rejected Linjeta in 2010. “We believe that G2 Linjeta is an approvable drug,” writes analyst Andrew Vaino, adding that the “Phase 3 data for of Linjeta were not all bad…which gives us confidence that the G2 version is likely to be approved.”
G2 Linjeta sales could exceed $2 billion a year, he predicts and notes that his price target does not take potential European sales into account, and models nothing for upfront milestones from a potential partnership.
Biodel’s technology is simple but clever, he points out. Fast-acting insulins are all chemically modified proteins, whereas Linjeta is not. Insulin exists as a hexamer, or a grouping of six individual peptides, held together around a zinc ion. Biodel has patented a technique for separating the hexamer into monomers. By applying the insulin monomer, which is what Biodel does, absorption is accelerated and glucose can be better controlled