The Medicine Is WorkingInstitutional investors weren't privy to what tiny biotech Sonus Pharmaceuticals () was up to, but Schering AG () knew -- and acted. In October the German giant acquired a 15% stake in Sonus and gained a global, exclusive license for Sonus' breast-cancer treatment TOCOSOL paclitaxel -- valued at $220 million in licensing fees, royalties, and milestone payments from Schering. That's a big vote of confidence in Sonus, which has no sales yet, says Mark Lappe of Efficacy Capital. He figures TOCOSOL, seen as a replacement for Taxol, will have a potential $1 billion in sales in six or seven years. It is now in Phase 3 trials. He sees the stock at 12 in a year. Also bullish is Mark Monane of investment bank Needham, which has done banking for Sonus. He says TOCOSOL has advantages over Taxol, offering superior safety while allowing delivery of a greater dose density and greater efficacy. He sees Sonus in the black by 2009 -- earning 36 cents a share, and 77 cents in 2010. It trades at 4.56.
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