VRUS – I normally don’t post a piece that merely announces an analyst downgrade, but this is an exception. The question I would like to ask is: What took so long? VRUS was grossly overpriced, IMO, following the release of preliminary R7128 data in January, yet the analyst waited until the stock fell by 40% to issue a downgrade. (My own take on the VRUS vs IDIX valuation gap is in #msg-25870940.)
>> Pharmasset Declines on Downgrade, Analyst Says Clevudine and R7128 Are Priced In
Tuesday February 19, 1:50 pm ET
NEW YORK (AP) -- Shares of Pharmasset Inc. fell Tuesday after a UBS analyst downgraded the stock, saying the value of the company's two most promising drug candidates is now reflected in the share price.
Annabel Samimy said Pharmasset may be able to offer the best treatments for both Hepatitis B and C drugs, with clevudine and R7128. Although she said both drugs are promising, she said the stock price now reflects their value, and Pharmasset will not have much news to report for the rest of 2008.
The stock gave up $1.53, or 7.1 percent, to $19.97 in afternoon trading.
Samimy downgraded the stock to "Neutral" from "Buy," and raised her price target to $23 per share from $17. She said both drugs are appear safe and effective, and their markets have significant room for growth.
Pharmasset's share price more than doubled in January after the company reported clinical trial results that showed R7128, combined with two other drugs, lowered the Hepatitis C virus to undetectable levels after four weeks of treatment.
But after the company reports full results, she said, Pharmasset will have little data to offer until mid-2009. <<
[The notion that Roche will drop its own HCV drug, R1626, in favor of VRUS’ R7128 is plausible—even likely, IMO. However, VRUS’ valuation seems to have this scenario largely priced in already. IDIX remains a better value, IMO, even after IDIX’s own big move during 2008 (#msg-25870940).]
NEW YORK (AP) -- Shares of clinical-stage pharmaceutical company Pharmasset Inc. rose Friday after analysts expressed optimism about the company's hepatitis Cdrug candidate in partnership with Roche AG.
Merriman Curhan Ford analyst Brian McCarthy noted that hepatitis candidate, R7128, is slated to enter a midstage study in the fourth quarter of the year. He rates the shares "Buy."
He believes that Pharmasset's current share price doesn't account for positive R7128 data, the company's other programs and partnerships, upcoming clinical milestones, and the potential for generating revenue.
JMP Securities Liisa A. Bayko is also upbeat about Pharmasset. She said that Roche currently has a hepatitis C drug of its own, R1626, but it has been plagued by toxicity concerns. She believes that Roche might put R1626 on the back burner due to the concerns with the drug in favor of R7128.
"In our mind, this could be the biggest catalyst for shares of Pharmasset this year," Bayko said.
She rates Pharmasset shares "Buy" with a $35 price target.
On Thursday, Pharmasset said its first-quarter loss widened on a decrease in collaborative payments and higher costs for its hepatitis B program. <<
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