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Sunday, January 29, 2006 10:29:51 AM
KOSP - Headed lower for a text of that green line on the weekly chart? Probably slightly below 37. Nearly zero debt.
Kos Falls on Merck Niaspan Threat
Thursday December 15, 3:50 pm ET
By Wallace Witkowski, AP Business Writer
Kos Pharmaceuticals Shares Fall on Merck Niaspan Threat, Slowing Prescription Growth
NEW YORK (AP) -- Drug maker Merck & Co.'s new strategy, announced Thursday, to normalize cholesterol sets it on a course to overwhelm Kos Pharmaceuticals Inc., whose lead drug Niaspan raises levels of high density lipids, or "good" cholesterol.
Kos shares fell $18.14, or 26 percent, to $51.79 in afternoon trading at more than 27 times their average volume. Shares have risen from a 52-week low of $30.30 in March to a 52-week high of $78.40 in August.
In a presentation on how Merck plans to regain market leadership after the debacle of arthritis drug Vioxx and the pending loss of patent protection of cholesterol drug Zocor, the Whitehorse Station, N.J., company said it will lead an effort to develop a pair of combination products that raises "good" cholesterol while lowering "bad" cholesterol, and file an application with the Food and Drug Administration in 2007. One product would combine extended-release niacin with an anti-inflammatory drug and the other would combine these compounds with Zocor. Merck shares rose 50 cents to $29.70 on the New York Stock Exchange.
"This is a direct competitive threat and quite a serious one," said SG Cowen analyst Ian Sanderson in an interview. Sanderson speculated that Merck could have a competing product on the market by 2008. However, the analyst said Kos may have recourse to sue Merck over patents for extended-release niacin, the active ingredient in Niaspan, when the company goes to file with the FDA.
On Nov. 22, shares of Kos jumped 6 percent when analysts speculated that a Niaspan competitor from Pfizer Inc. would be delayed from release until 2009.
A slowing down in Niaspan sales for November also did not help Kos' share price.
In a research note, Natexis analyst Timothy Chiang said an analysis of trends showed Niaspan new prescriptions grew by 4.6 percent, and total prescriptions rose 8.8 percent in November, slowing down from a 7.6 percent growth in new prescriptions and a 10.3 percent growth in total prescriptions in October. New and total prescriptions have steadily fallen from last November's growth rates of 27.5 percent and 22.4 percent, respectively.
Niaspan accounted for $114.3 million of Kos' $205.1 million in third-quarter revenue.
Chiang maintained his fair value estimate of the stock of $68.90, pointing to a 24 percent ramp up in price over the past month and a doubling of the price in the year to date.
Sanderson reasoned that slowing sales could also point to a general slowing in the cholesterol drug market, as some patients may be holding out for discounts under the Medicare prescription drug benefits set to start on Jan. 1. He expects the cholesterol drug market will reaccelerate in 2006.
http://finance.yahoo.com/q/ks?s=KOSP
Kos Falls on Merck Niaspan Threat
Thursday December 15, 3:50 pm ET
By Wallace Witkowski, AP Business Writer
Kos Pharmaceuticals Shares Fall on Merck Niaspan Threat, Slowing Prescription Growth
NEW YORK (AP) -- Drug maker Merck & Co.'s new strategy, announced Thursday, to normalize cholesterol sets it on a course to overwhelm Kos Pharmaceuticals Inc., whose lead drug Niaspan raises levels of high density lipids, or "good" cholesterol.
Kos shares fell $18.14, or 26 percent, to $51.79 in afternoon trading at more than 27 times their average volume. Shares have risen from a 52-week low of $30.30 in March to a 52-week high of $78.40 in August.
In a presentation on how Merck plans to regain market leadership after the debacle of arthritis drug Vioxx and the pending loss of patent protection of cholesterol drug Zocor, the Whitehorse Station, N.J., company said it will lead an effort to develop a pair of combination products that raises "good" cholesterol while lowering "bad" cholesterol, and file an application with the Food and Drug Administration in 2007. One product would combine extended-release niacin with an anti-inflammatory drug and the other would combine these compounds with Zocor. Merck shares rose 50 cents to $29.70 on the New York Stock Exchange.
"This is a direct competitive threat and quite a serious one," said SG Cowen analyst Ian Sanderson in an interview. Sanderson speculated that Merck could have a competing product on the market by 2008. However, the analyst said Kos may have recourse to sue Merck over patents for extended-release niacin, the active ingredient in Niaspan, when the company goes to file with the FDA.
On Nov. 22, shares of Kos jumped 6 percent when analysts speculated that a Niaspan competitor from Pfizer Inc. would be delayed from release until 2009.
A slowing down in Niaspan sales for November also did not help Kos' share price.
In a research note, Natexis analyst Timothy Chiang said an analysis of trends showed Niaspan new prescriptions grew by 4.6 percent, and total prescriptions rose 8.8 percent in November, slowing down from a 7.6 percent growth in new prescriptions and a 10.3 percent growth in total prescriptions in October. New and total prescriptions have steadily fallen from last November's growth rates of 27.5 percent and 22.4 percent, respectively.
Niaspan accounted for $114.3 million of Kos' $205.1 million in third-quarter revenue.
Chiang maintained his fair value estimate of the stock of $68.90, pointing to a 24 percent ramp up in price over the past month and a doubling of the price in the year to date.
Sanderson reasoned that slowing sales could also point to a general slowing in the cholesterol drug market, as some patients may be holding out for discounts under the Medicare prescription drug benefits set to start on Jan. 1. He expects the cholesterol drug market will reaccelerate in 2006.
http://finance.yahoo.com/q/ks?s=KOSP
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