In November 2009, Nabi and GlaxoSmithKline (GSK) signed a licensing agreement for NicVAX and development of a second generation nicotine vaccine.  The agreement involved a $40 million upfront payment with the potential to receive more than $500 million (including upfront payment) as option fees and milestones for NicVAX and follow-on nicotine vaccines.

Nabi has the potential to receive double-digit royalties from sales if the product is commercialized. GlaxoSmithKline will have an option to exclusively in-license NicVAX on a worldwide basis and a license to develop follow-on next-generation nicotine vaccines using Nabi's intellectual property together with its own technology.

Estimates put the worldwide number of smokers at about 1.2 billion and smoking causes approximately 5.4 million deaths every year. In view of the huge increase in the number of smokers, the global market for smoking cessation is expected to increase significantly.

Currently available smoking cessation therapies have relapse rates which can be as high as 90% in the first year after a smoker quits. Although NicVAX holds immense potential, we however remain concerned about its successful development. In October 2009, an anti-smoking vaccine developed by Cytos Biotechnology and Novartis (NVS) missed its main goal in a mid-stage study.

We believe the need for additional funds has arisen primarily due the advancement of the company’s Relovair Program in collaboration with GlaxoSmithKline (GSK). The program, currently in phase III studies, aims to develop a next generation combination treatment for patients with chronic obstructive pulmonary disease (COPD) and asthma.
 
The phase III program, to be conducted with more than 6,000 patients, is designed to evaluate the safety and effectiveness of the addition of a long-acting beta2 agonist (LABA) to an inhaled corticosteroid (ICS) in patients suffering from COPD. Enrollment has started for the study.
 
However, Theravance has faced certain hiccups with the asthma trial. The company announced recently that it was not certain about the US Food and Drug Administration’s (FDA) position on the Relovair program for asthma treatment. This could increase the time and costs involved in the trial.
 
In February 2010, the FDA issued certain safety norms for the use of LABAs on asthma patients. These were necessary as studies showed a higher risk of asthma symptoms, leading to hospitalizations of pediatric and adult patients. Some patients even died following treatment with LABAs.
 
The FDA has recommended the use of LABAs only in combination with an asthma controller medication. Since the Relovair program is a combination of a LABA and an ICS, we believe it will comply with FDA’s requirements.
 
We believe the Relovair program holds immense potential. It aims to replace one of Glaxo’s best selling drugs Advair, which recorded sales of £5 billion in 2009. However, the drug will go off-patent in the US in 2010 and in Europe in 2013.
 
Approval and launch of any compound under the collaboration will generate a strong royalty stream for Theravance and push the company towards profitability. We are Neutral on the stock.

Chicago, IL – March 15, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Allergan, Inc. (AGN), Medicis Pharma (MRX), Signature Bank (SBNY), Washington Federal Inc. (WFSL) and Bank of America Corp. (BAC).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

Label Expansion for Botox

Allergan, Inc. (AGN) recently received good news with the US Food and Drug Administration (FDA) granting approval to Botox for the treatment of increased muscle stiffness in the elbow, wrist and fingers in adults with upper limb spasticity.

The FDA approval comes after the company submitted additional data following the receipt of a complete response letter from the agency in May 2009.

Botox was originally developed for the treatment of certain ophthalmic movement disorders, but has since seen strong growth thanks to approval for additional indications.

Although Botox is known more for its cosmetic uses, therapeutic indications accounted for 52% of total Botox sales in 2009. Allergan has been working on gaining approval for additional indications for Botox. Botox sales declined marginally in 2009 mainly due to weak consumer spending, concerns regarding its safety record, and increased competition from Medicis Pharma’s (MRX) Dysport.

In order to drive growth, Allergan is currently conducting studies for several indications including chronic migraine, lower limb spasticity, neurogenic overactive bladder, idiopathic overactive bladder and benign prostate hyperplasia.

Treasury Sells Signature Warrants

The Treasury announced Thursday that it has received net proceeds of $11.2 million from the sale of warrants it obtained as part of its investment in New York-based Signature Bank (SBNY) through the Troubled Asset Relief Program (TARP) during the height of the financial crisis. In Mar 2009, Signature had repaid the entire $120 million of bailout money it had received from the government in Dec 2008.

The Treasury auctioned 595,829 warrants at $19.00 each. The final price was above the floor price of $16 per warrant set by Treasury. The Signature warrants have a strike price of $30.21 and expire in Dec 2018.

The current move will completely free Signature from government intervention. The auction for Signature warrants follows the sale of Washington Federal Inc.’s (WFSL) warrants on Wednesday and Bank of America Corp.’s (BAC) warrants last week. The government received net proceeds of $15.4 million from the sale of Washington Federal warrants and a record $1.5 billion from the sale of Bank of America warrants.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Results from Study AP-ADF-114 (A Randomized, Double-Blind, Placebo- and Active-Controlled Study to Assess the Relative Abuse Potential of Acurox Tablets in Non-Dependent Recreational Opioid Users) showed that Acurox was significantly disliked compared to oxycodone HCl tablets alone when excess doses are swallowed. All five co-primary endpoints of the study were achieved.

Acurox is an orally administered tablet containing oxycodone HCl as an active analgesic ingredient, niacin as an active ingredient in subtherapeutic amounts, and a unique combination of other ingredients.

The drug has been developed under King’s agreement with Acura Pharmaceuticals for the licensing, development, and commercialization of immediate release (IR) pain medicines utilizing Acura's Aversion (abuse-deterrent) technology.

Acurox has yet to gain approval from the US Food and Drug Administration (FDA) for the relief of moderate to severe pain. In June 2009, King and Acura received a "complete response letter" from the FDA regarding the New Drug Application (NDA) for Acurox. The FDA raised issues regarding the potential abuse deterrent benefits of Acurox.

Although the agency did not ask for additional clinical studies to be conducted, King and Acura were asked to submit the NDA to an FDA advisory committee which will review the evidence to support the potential abuse deterrent effects of Acurox compared to other currently marketed short-acting oxycodone opioid products. A date for the advisory committee meeting has yet to be announced.

King and Acura intend to submit data from Study 114 as well to the advisory committee. A favorable recommendation would be a major boost for King.

We currently have a Neutral recommendation on King. While declining prescription trends of key products and regulatory delays in receiving approval for new products remain a matter of concern, we view the recent launch of Embeda as a major milestone for the company. Embeda represents significant growth potential and could help the company achieve a leading position in the abuse-deterrent opioid market.

Salix suffered a major setback in Dec 2007 when its lead product, Colazal, started facing generics from several companies including Mylan (MYL). The genericization of Colazal adversely impacted the company’s top-and bottom-line.

Since then, Salix has been working on reviving growth and is now focusing on gaining additional indications for its current growth driver, Xifaxan (rifaximin). More than earnings, we believe that investor focus will remain on the company’s success in gaining approval for additional indications of Xifaxan.

Salix has filed for approval of Xifaxan for the treatment of hepatic encephalopathy (HE). An advisory committee of the US Food and Drug Administration (FDA) recently voted in favor of approval. A response from the FDA should be out by March 24. Approval for the HE indication would be a major boost for the stock.

Estimate Revisions Trend

There have been no estimate revisions for the fourth quarter of 2009 over the past 30 days. The Zacks Consensus Estimate of a loss of 14 cents is in-line with the guidance provided by the company with no potential surprise.

For the full-year 2009, one of the 9 analysts following the stock has revised his or her estimate upward over the past 30 days. The current Zacks Consensus Estimate of a loss of 89 cents is a penny below the company’s guidance of a net loss of 90 cents.

Salix expects revenues to increase to $230 million in 2009. Revenues should be driven by Xifaxan, which is currently approved for the treatment of patients 12 years of age and older with travelers’ diarrhea caused by non-invasive strains of E coli.

We believe that the drug will experience solid, above-market trend growth for traveler’s diarrhea given its safety profile and lack of systemic absorption. Moreover, the product should benefit from price increases and positive data presentation. Xifaxan sales should cross $115 million in 2009.

New product approvals, continued growth for Xifaxan and label expansion for Xifaxan should help Salix swing to profitability in 2010. The current Zacks Consensus Estimate for 2010 is 13 cents.

Over the past 30 days, 2 of the 10 analysts following the stock have reduced their estimates for 2010 with no revisions in the opposite direction. 2010 earnings estimate is down by a cent during this period.

Historically, Salix usually beats its earnings guidance and reports a lower-than-expected loss. In the third quarter of 2009, the company reported a loss of 15 cents, well below the Zacks Consensus Estimate of a loss of 29 cents. A similar trend was observed in the first two quarters of 2009, as well.

There is the possibility that Salix could post a higher-than-expected loss in 2009 if Xifaxan revenues come in below expectations. Moreover, selling, general and administration expenses could be higher than expected with the sales force promoting two new products -- Apriso and Metozolv ODT.

Our Take

We currently have a Neutral recommendation on Salix. We believe the main potential for the company lies in gaining approval for additional indications for Xifaxan (rifaximin). The promotion of newly launched products, Apriso and Metozolv ODT, will also be a high priority for the company.

In the meantime, we remain concerned about the possibility of a generic company initiating a patent challenge for Xifaxan. The entry of generic versions of Xifaxan would be a major setback for Salix.

Antiviral product sales for 2009 grew to $5.84 billion, up 25%. Atripla, with quarterly sales of $697.8 million, became the lead product surpassing $670.7 million of Truvada for the first time.

In a positive development, Gilead recently received the much awaited US Food and Drug Administration (FDA) approval for Cayston for the treatment of lung infection in patients suffering from cystic fibrosis (CF). This will enable Gilead to further diversify its revenue stream. Cayston will primarily compete with Novartis’ (NVS) Tobi, which generated $295 million in global sales in 2009.

We are pleased with the strong outlook provided by Gilead for 2010. On top of a 27% rise in 2009 product sales ($6.47 billion), the company expects to generate $7.6-$7.7 billion in product sales in 2010, representing a growth of 17%-19% over 2009. Gross margin is expected to be in the range of 75%-77%.

Strong Growth Potential

Gilead’s strategy of creating fixed-dose combinations of existing HIV/AIDS drugs has been an enormous success. In the US, it is estimated that there are 1.2 million HIV-infected adults. Approximately 79% (948,000) of these have been diagnosed. About 61% of the diagnosed patients (578,000) are taking antiretroviral medications.

Gilead commands a 75% market share (approximately 433,000 patients) within this antiretroviral population. The market in Europe has similar statistics.
 
We believe with a growing patient base, Gilead should be able to maintain growth in its HIV franchise. This is significant as the company earns more than 80% of its revenues from the sale of HIV products.
 
In order to strengthen further its HIV segment, Gilead is working on a four-in-one combination pill, Quad which was recently found to be more effective than Atripla in a phase II study. On approval, Quad has the potential to reach blockbuster status.
 
Gilead has made good progress with respect to its hepatitis B virus (HBV) franchise as well which consists of Viread and Hepsera. At the end of 2009, these two drugs accounted for approximately 53% of total HBV prescriptions in the US. Viread is gaining market share in Europe as well. As of October 2009, Viread’s share of the HBV market was estimated to be 19% compared to 7% in October 2008.
 
Gilead is looking to increase its share in the HBV market in Asia also. In Nov 2009, the company entered into a licensing agreement with GlaxoSmithKline (GSK) to commercialize Viread for the treatment of chronic HBV infection in adults in five Asian countries. We believe expansion into Asia will boost HBV segment revenues.
 
Estimate Revisions Trend

Following the release of strong results and a positive 2010 outlook, many analysts following the stock have revised their estimates. Over the past 30 days, 4 of the 17 analysts following the stock have raised their earnings estimates for fiscal 2010 with only 1 moving in the opposite direction. On balance, 2010 earnings estimates have gone up by 5 cents with the current Zacks Consensus Estimate being $3.42.

Similar positive bias can be witnessed for 2011 as well with 3 of the 16 analysts covering the stock raising their estimates with only 1 doing the reverse. On balance, 2011 earnings estimates have gone up by 6 cents with the current Zacks Consensus Estimate being $3.81.

The upward bias in estimate revisions can be witnessed for the first two quarters of 2010 as well. For the first quarter, 6 of the 16 analysts covering the stock have raised their estimates in the past 30 days. No downward revision has taken place during the same period. However, the trend is mixed for the second quarter of 2010 with 4 of the 17 analysts covering the stock raising their estimates with 2 analysts moving in the opposite direction.

In terms of earnings surprises, earnings exceeded the Zacks Consensus Estimate in each of the last four quarters, with a four-quarter average of 6.71%. This means that on average, earnings beat the Zacks Consensus Estimate by 6.71%.

Our Recommendation

We currently have an Outperform recommendation on Gilead, which is supported by the Zacks #1 Rank. We remain optimistic about the growth of HIV/AIDS franchise drugs Truvada and Atripla. Earnings over the past few quarters have consistently been above expectations, specifically on strong sales of the HIV franchise products.

Meanwhile, the worldwide panic regarding swine flu has boosted the company’s royalty income, a trend we expect to continue, thanks to increased sales of the anti-viral drug Tamiflu.
 

The company intends to apply for European approval of the drug for the same indication by mid-2010. AMAG is currently consulting with commercial partners in the European Union. Recently, 3SBio Inc. (SSRX), AMAG’s partner in China, submitted an application for a registrational trial to the Chinese State Food and Drug Administration for Feraheme injection for intravenous use.
 
For 2009, AMAG Pharmaceuticals reported a net loss of $93.4 million, or $5.46 per share, as opposed to a loss of $71.6 million, or $4.22 in 2008. Revenue in 2009 was $17.2 million as opposed to $1.9 million in 2008. Total operating costs and expenses for 2009 stood at $115.1 million compared to $81.5 million in 2008. The Zacks Consensus Estimate for 2009 was a loss of $5.48 per share.

In Sep 2009, Allos received accelerated approval from the US Food and Drug Administration (FDA) for Folotyn for the treatment of patients with relapsed or refractory PTCL. During the third quarter conference call, the company stated the pricing of the drug - the average wholesale acquisition cost as $3,125 for the 20 mg vial and $6,250 for the 40 mg vial.

Allos has agreed to conduct additional clinical trials to further verify the benefit of Folotyn. The requirement of additional trials comes with accelerated FDA approval as the agency requires further studies after the launch to confirm the drug's benefits to patients. The drug was launched commercially in Jan 2010 although it has been made available to patients since Oct 2009. Allos recorded $3.6 million in revenues for the fourth quarter and the full year.

A 73.5% rise in operating expense during the quarter was primarily responsible for the increased losses. Following the approval of Folotyn, Allos has done the necessary preparations for its commercial launch. This led to a 149% increase in selling, general and administrative expenses. However, research and development expenses recorded a 1.4% decline to $7.9 million.

Allos exited 2009 with $158.5 million in cash, cash equivalents and investments in marketable securities. In Oct last year, the company received net proceeds of approximately $93 million from a public offering of 14 million shares. Allos had to raise funds to support the commercial launch of Folotyn in addition to carrying out its other clinical trials.

For 2010, Allos expects its total operating costs in the range of $120 - $130 million. The company has not provided any revenue guidance. A marketing authorization application of Folotyn is expected to be submitted in Europe by the fourth quarter of 2010. We have a Neutral recommendation on the stock.

The FDA did not grant approval based on concerns regarding a preclinical finding of pancreatic acinar cell tumors in rats. Horizant, which has been developed by XenoPort, Inc. (XNPT), is a Transported Prodrug of Pfizer’s (PFE) gabapentin.

This is not the first time that Horizant’s approval has been delayed. Earlier, in November 2009, the FDA had pushed back the approval date for Horizant by 90 days stating that a risk evaluation and mitigation strategy (REMS) would be needed for approval.

Glaxo and XenoPort are currently evaluating the CRL and intend to communicate with the FDA to determine the next course of action. The FDA’s decision is a major setback for both the companies, especially XenoPort as Horizant is its lead pipeline candidate.

Horizant is also being studied for other indications including neuropathic pain and migraine prophylaxis. However, given the FDA’s response letter, there is now limited visibility on the future development and regulatory path for Horizant. We believe the FDA is likely to ask the companies to conduct extensive additional studies in order to gain approval.

The delay in Horizant’s approval is a disappointment for Glaxo. Several of Glaxo’s products are facing patent challenges and the company’s pipeline needs to deliver in order to make up for lost revenues.

We currently have an Underperform recommendation on Glaxo. With several products expected to lose exclusivity and the swine flu opportunity likely to miss expectations, we expect Glaxo’s top-line to remain under pressure in the coming quarters.

During the fourth quarter, Amgen’s ESA franchise contributed 35% to total revenues. Aranesp sales declined 8% year over year to $648 million (US - $288 million, down 20%; ex-US - $360 million, up 4%), mainly due to a decline in demand reflecting the negative impact, primarily in the supportive cancer care setting, of additional product label changes, which were introduced in August 2008. Epogen sales increased 9% to $703 million reflecting an increase in demand, which was supported by patient growth and an increase in average net sales price.

Meanwhile, Procrit recorded an 8.7% drop in sales ($2,245 million) during 2009 primarily due to the declining markets for ESAs in the U.S. Although sales from Aranesp and Epogen are quite crucial for Amgen, Johnson and Johnson is less dependent on Procrit, which contributed about 10% and 3.6% to pharmaceutical business revenue and total revenues, respectively during the full year.
 
The inclusion of a safety-related boxed warning on the labels of Amgen’s Aranesp and Epogen and Johnson and Johnson’s Procrit has had an adverse impact on the sales of these products. The introduction of the REMS is likely to restrict sales further.

Performance was driven by higher revenues and lower expenses. Revenues increased 5% to $1.1 billion, with Tysabri and Avonex being the primary growth drivers.

For the full year, the company reported earnings of $4.03, well above the Zacks Consensus Estimate of $3.93 and the year-ago earnings of $3.58. Full-year revenues increased 7% to $4.4 billion.

Revenue by Major Products

Fourth quarter Tysabri revenues came in at $216 million, up 39% from the prior period. Global in-market net sales of Tysabri, which is partnered with Elan Corp. (ELN), came in at $296 million (up 37%) in the fourth quarter of 2009. Tysabri global sales increased 30% to $1.1 billion in 2009 (US - $509 million; ROW [Rest of the World] - $551 million).

Despite carrying a black-box warning for the risk of progressive multifocal leukoencephalopathy (PML) and other cautionary language, Tysabri continued to see an increase in patients. Biogen estimates that as of the end of Dec 2009, about 48,800 patients were on commercial and clinical Tysabri therapy worldwide. This represents an increase from the 46,200 patients reported by the company in the third quarter of 2009.

However, we note that the number of new patients adopting Tysabri has been declining over the past few quarters. The US Food and Drug Administration (FDA) recently announced that the Tysabri label should contain stronger language regarding the incidence of PML associated with increased use of the drug. With Tysabri being an important growth driver for Biogen, we remain concerned that an increase in the number of PML cases associated with its use could lead to a slowdown in Tysabri sales going forward.

Meanwhile, Biogen’s lead multiple sclerosis (MS) product Avonex posted fourth quarter sales of $596 million (up 5%). Full-year sales came in at $2.3 billion, up 5%. Rituxan revenues declined 3% to $1.1 billion for the year due to the expiration of royalties on sales outside the U.S. Rituxan revenues fell 15% to $257 million in the fourth quarter. Biogen is looking to expand Rituxan's label to revive growth.

Revenues from other products increased 40% to $14 million in the fourth quarter of 2009. For the full year, revenues from other products increased 10% to $54 million. While fourth quarter royalties increased 41.4% to $41 million, full-year royalties increased 6.9% to $124 million.

2010 Outlook Exceeds Expectations

Biogen Idec provided better than expected earnings guidance for 2010. The company expects to earn more than $4.55 per share on revenue growth in the mid-single digits. This is well above the current Zacks Consensus Estimate of $4.44. Biogen expects core operating expense growth in the low single digits. While R&D is expected to be 24% - 27% of total revenue, SG&A is expected to be 20% - 22% of total revenue. Biogen shares were up 1.9% following the release of fourth quarter results.

Biogen continued to repurchase shares during the fourth quarter. About 14.8 million shares of stock were repurchased at a total cost of $694 million in the reported quarter. An additional 5.4 million shares (for $289 million) were repurchased in the first quarter of 2010 as well.

Biogen has $288 million remaining under its Oct 2009 program. The company exited the year with $2.5 billion in cash, cash equivalents and marketable securities. The repurchase of shares should help boost the bottom-line.

Our Expectations

We currently have a Neutral recommendation on Biogen. Key products Avonex and Tysabri continue to contribute significantly to sales, and we expect Biogen to maintain its leading position in the multiple sclerosis market going forward. The company is also working on building its pipeline through acquisitions and in-licensing deals, which should contribute to long-term growth.

Crestor is one of AstraZeneca’s key drugs having logged sales of about $4.5 billion in 2009. During the fourth quarter of 2009, total prescriptions for Crestor increased 20% compared with 4% for the overall statin market. In addition, its share of total prescriptions continued to increase to 11.3%.

The FDA approval is likely to increase the targeted patient population which in turn should boost sales. Wider application means Crestor will be able to target about 6.5 million new patients who were not taking cholesterol lowering drugs. However, the future growth trajectory of Crestor may not be as smooth since Pfizer’s (PFE) Lipitor will lose patent exclusivity in 2011. Thus, the entry of generics will increase competition in the cholesterol lowering market.

COPD refers to the obstruction of airways caused by chronic bronchitis. The disease affects about 14 million people in the U.S. and is the fourth most common cause of death. On approval, aclidinium could garner a portion of the highly competitive COPD market.

The lucrative COPD market led Forest Laboratories to enter into a deal with Switzerland-based Nycomed last year for the U.S. marketing rights of an experimental lung disease drug, Daxas. Forest is looking at alternatives to boost its pipeline to offset the loss of sales following the genericization of its biggest product, Lexapro, in the coming years. Given the scenario, Forest has acquired the rights to many products generally in mid- to late-stage development either through licensing deals or acquisitions.

The company expects its core business -- generics -- to drive growth, with support from its branded business. About 70% of total revenues are expected to come from the generics business in 2015. Teva currently has a 22% share of the US generics market. The company aims to grow its market share in the US to 35% by 2015.

We believe that the growing demand for generics will help drive growth of Teva's generics business in both the U.S. and other territories. A major portion of this growth should come from those European and international markets that currently have lower generic penetration rates.

Moreover, branded products representing sales worth $150 billion are scheduled to lose exclusivity over the next five years. As of October 23, 2009, the company had 210 abbreviated new drug applications (ANDAs) pending approval at the US Food and Drug Administration (FDA), representing more than $113 billion in branded sales. About 136 of these ANDAs are paragraph IV filings, most of which should be resolved over the next few years. Teva estimates it was first-to-file on about 83 of these products, representing more than $54 billion in branded sales. As such, the company is well-positioned to gain a significant share of the generics market.

Meanwhile, bio-generics should also be another important growth driver going forward. Teva is working on building its portfolio of biopharmaceutical and bio-generic products, which represent a new and significant area of growth for the company. The company’s 2008 acquisition of CoGenesys, Inc. has not only helped Teva expand its biopharmaceutical pipeline but has also provided it with access to albumin fusion technology, which enables the development of long-acting biological drugs and additional protein-based medicines across broad therapeutic areas.

Additionally, Teva’s joint venture with Lonza Group Ltd. for the development, manufacture and marketing of several affordable, effective and safe biosimilar versions of a selected portfolio of biologic pharmaceuticals should help the company advance in its efforts to establish a leading position in the bio-generics market.

We currently have an Outperform recommendation on Teva. We expect the company to continue posting strong revenues and earnings thanks to new product launches, both generic and branded.

Although Lexapro sales declined 0.5% to $582.6 million, Namenda, which is approved for the treatment of moderate and severe Alzheimer’s disease, delivered sales of $282.5 million, recording a growth of 17.3% from the year-ago period. Improved patient access and increased promotional efforts should help keep Namenda sales strong.

Bystolic, Forest’s beta-blocker for the treatment of hypertension, posted sales of $47.5 million. This was significantly higher than the year-ago sales of $21 million. Contract revenue, consisting primarily of Benicar co-promotion income, increased 6.5% to $55.8 million.

Forest’s most recent product launch, Savella, which is approved for the management of fibromyalgia, posted sales of $15.4 million. The product, which has been developed in collaboration with Cypress Biosciences (CYPB), was launched in late April 2009. We believe Savella may have multi-hundred million dollar potential.

Selling, general and administrative expense was $307 million, reflecting the company’s promotional activities in support of its currently marketed products, especially Savella. Research and development spending increased 22.9% during the quarter, excluding licensing payments.

Forest also provided an update on its pipeline and recent in-licensing activities. The company recently filed for US Food and Drug Administration (FDA) approval of ceftaroline, which is being developed for the treatment of patients suffering from complicated skin structure and skin infections (cSSSI), community acquired bacterial pneumonia (CABP) and for patients infected with methicillin-resistant Staphylococcus aureus (MRSA).

Forest also reported positive top-line results on three pipeline candidates: linaclotide (for chronic constipation), cariprazine (for the treatment of acute exacerbation of schizophrenia) and aclidinium (for the treatment of chronic obstructive pulmonary disease). Besides, the company is also pursuing in-licensing deals to expand its pipeline and recently announced two deals, including one with AstraZeneca (AZN).

Forest shares were up 2.7% following the release of third quarter results. While we are pleased with the company’s strong third quarter results, we remain concerned about longer-term growth at Forest, especially towards the beginning of the next decade when Lexapro is exposed to generic competition.

With Lexapro alone contributing more than 50% to the top-line, the entry of generic versions of the product in the next few years puts a lot of pressure on the pipeline to come through. We currently have a Neutral recommendation on Forest.

Clinical trials have shown that Fanapt improved symptoms in schizophrenic patients compared to a placebo therapy. The most common adverse drug reactions were dizziness, dry mouth, fatigue, nasal congestion, orthostatic hypotension, somnolence, tachycardia and weight gain.

Under an agreement with Vanda Pharmaceuticals (VNDA), Novartis acquired exclusive commercialization rights to Fanapt in the U.S. and Canada in October 2009. In addition, Novartis has the rights to develop and commercialize an injectable form of the drug for these markets. Vanda will receive an upfront payment of $200 million as well as the potential to receive milestone payments of up to $265 million. Vanda also will receive royalties on the US and Canadian net sales of Fanapt.

In December 2009, Eli Lilly (LLY) received FDA approval for Zyprexa Relprevv (olanzapine), the new extended-release injectable version of its blockbuster drug Zyprexa for the treatment of schizophrenia in adults. With respect to treatment option, the approval is significant as the Zyprexa Relprevv injection maintains therapeutic drug levels for up to four weeks, when the disease relapses following irregular intake of prescribed medications. Long-acting treatments play a beneficial role since non-adherence to medication is a big problem for the patients.

Schizophrenia is a chronic, severe and disabling mental disorder affecting 2.4 million Americans or about 1.1% of the adult population in the U.S. While there is no cure for the disease, proper medication can keep it in check. As per estimates, the global schizophrenia market was valued at $15.9 billion in 2008 which is expected to reach $17.2 billion by 2015.

The delay comes as a big setback for the company as it has been banking heavily on the approval of Afrezza. Moreover, MannKind has received no intimation about the expected date of the approval. However, discussions between MannKind and the FDA have been quite satisfactory so far regarding pediatric studies of Afrezza. MannKind has agreed to conduct a phase IV study of the drug in 500 pediatric patients of at least four years of age.

Although we believe that Afrezza offers distinct advantages over the traditional needle-based insulin therapy that currently dominates the market, the path to approval is not easy. Many large pharmaceutical companies in the past have already made unsuccessful attempts to launch such a product.

Earlier in 2006, Pfizer’s (PFE) Exubera was the first FDA approved inhaled insulin which failed miserably later on, with the occurrence of lung cancer in some patients who were taking Exubera. While the number of cases was too few to conclusively link Exubera to the development of lung cancer, the results still cast a shadow on the future of other inhaled insulin candidates like Afrezza. Following the failure of Exubera, other players like Novo Nordisk (NVO) and Eli Lilly (LLY) discontinued their inhaled insulin programs, citing the lack of confidence regarding prospects for an inhaled insulin product.

The delay in the FDA approval will further hinder any possibility of a partnership agreement. Being in a tight liquidity position, MannKind needs funds for which a suitable partnership is an option. We have a Neutral recommendation on the stock.

The company reported $82.6 million in revenues, an increase of 13% from $73 million in the corresponding period last year. The increase in revenues was based on both price and volume contributions, as well as a positive impact of $1.9 million due to foreign exchange fluctuations.

While Immucor recorded robust growth in its top line, its gross margin suffered due to costs related to the company’s Quality Process Improvement Project, targeted at establishing a better quality system. The project, expected to be completed by the third quarter of this fiscal year, has been undertaken to address some deficiencies noted by the US Food and Drug Administration (FDA) in June last year.

During the quarter, Immucor incurred expenses of about $1.8 million related to this project, which brought down gross margin by 290 bps to 70.4% compared to the year-ago period. Operating expenses increased 7% year over year to $27.5 million primarily due to the increase in R&D expenses related to the development of more advanced instruments.

Immucor’s main products -- traditional reagents, capture reagents and instruments -- accounted for 63%, 25% and 12%, respectively, of total revenues. Although Immucor earns the most from the manufacture of traditional reagents, its gross margin at 76.8% is lower compared to capture reagents (81.6%). These three segments recorded a year-over-year revenue growth of 8.9%, 21.2% and 16.3%, respectively.

During the quarter, Immucor had steady order flow for two of its most important instruments -- Echo (77) and Galileo (27). Immucor is witnessing longer sales cycles for its Echo instruments. It expects orders for the product to be at the lower end of its guidance of 280 to 320 for the fiscal 2010.

Immucor reaffirmed its fiscal 2010 revenue and earnings guidance, which are expected in the range of $322 million - $332 million and $1.10 - $1.17 per share, respectively. The company repurchased about 300,000 shares of its stock during the second quarter for $5.5 million. Cash balance at the end of the quarter was $156 million, up from $136 million recorded during the quarter ended May 2009. We have a Neutral recommendation on the stock.

We believe that Afresa offers distinct advantages over traditional needle-based insulin therapy, which currently dominates the market. The key advantage is the convenience of an inhaled delivery. However, the path to approval is not easy since many large pharmaceutical companies in the past have made unsuccessful attempts to bring such a product into the market.

Back in 2006, Pfizer’s (PFE) Exubera was the first FDA approved inhaled insulin which later on failed miserably. Pfizer witnessed another major blow with the occurrence of lung cancer in some patients who were taking Exubera. While the number of cases was too few to conclusively link Exubera to the development of lung cancer, the results still cast a looming shadow on the future of other inhaled insulin candidates like Afresa.

Following the failure of Exubera, other players like Novo Nordisk (NVO) and Eli Lilly (LLY) discontinued their inhaled insulin programs, citing the lack of confidence regarding prospects for an inhaled insulin product.

With no product on the market and no revenues, we are very concerned about MannKind’s financial position. Additionally, any request from the FDA for further clinical trials on Afresa would result in a significant increase in the company’s operating expenses. In such a situation, the company might have to tap the financial markets for additional funds.

Meanwhile, although MannKind was seeking a suitable partner for Afresa, in October the company stated that it will not be able to enter into a deal before the FDA decision. We have a Neutral recommendation on the stock.

Given the swine flu scare, we expect Cepheid to benefit significantly from the introduction of this test. The FDA has issued the EUA to take care of public health due to the outbreak of the pandemic flu virus. The duration of the emergency is set to expire in April 2010.

Cepheid, based in Sunnyvale, California is a molecular diagnostics company that develops, manufactures and markets fully integrated systems for genetic analysis in the clinical molecular diagnostic market. The company derives revenues primarily from the sale of two instrument platforms, SmartCycler and GeneXpert systems and reagents associated with these instruments. The H1N1 test will run on its GeneXpert system.
 
We believe the approval will help Cepheid clock more revenues in the forthcoming period. It has become all the more necessary to combat the spread of swine flu since many children are being affected by the virus. Moreover, the prevailing winter season in the northern hemisphere makes the situation more difficult.

Although vaccines for this virus have been developed by many pharmaceutical players, including Sanofi-Aventis (SNY) and AstraZeneca (AZN), supply of the vaccine is not sufficient to meet the demand. In this scenario, a proper clinical test becomes a necessity for proper treatment of the infected.

Although Cepheid narrowed its loss during the third quarter of 2009, we remain concerned about the declining trend of the company’s system sales. We believe a tight spending environment in the current recessionary situation is impacting the ability of healthcare providers to purchase capital equipment.

Cepheid, being in the molecular diagnostics segment, does have huge potential, as this is the fastest growing segment in the in vitro diagnostics market. We are Neutral on the stock at this time.

Prevnar 13 is meant for the prevention of invasive pneumococcal disease (sepsis, meningitis, bacteremia, bacteremic pneumonia, and empyema), pneumonia, and acute otitis media caused by 13 types of streptococcus pneumoniae in infants and children of 6 weeks - 5 years of age. Although the vaccine has been approved in several countries, its approval in the US is quite crucial. The review is based on data from 13 phase III studies carried out on more than 7,000 children.

The approval of Prevnar 13 has been getting delayed over the last few months. While the original PDUFA date was September 2009, in August, it was pushed back by another three months. However, based on encouraging data from the studies, Pfizer is confident of gaining approval in due course.

Prevnar 13 is a new version of the currently available pneumococcal vaccine. Prevnar is one of the best selling vaccines worldwide with sales of about $2.7 billion in 2008. While Prevnar treats illness caused by 7 strains of pneumococcal bacteria, the new vaccine is expected to block 13 strains including the original 7. It is estimated that Prevnar 13 would cover 92% of invasive pneumococcal disease, compared to 81% covered by Prevnar. The company is currently seeking approval for Prevnar 13 in about 60 countries spanning six continents and has already been approved in four countries.

We believe approval of the new Prevnar is quite crucial for Pfizer as its highest selling drug Lipitor is slated to lose patent exclusivity in a few years.  Prevnar was one of the major products that Pfizer obtained from its $67 billion acquisition of Wyeth, which enabled it to diversify into vaccines and biotechnology medicines.

Chicago, IL – January 4, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Johnson & Johnson (JNJ), ViroPharma (VPHM), Theravance (THRX), Cubist Pharmaceutical (CBST) and Pfizer (PFE).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Thursday’s Analyst Blog:

Pipeline Setback for J&J

Johnson & Johnson (JNJ) has received yet another setback related to its pipeline candidate ceftobiprole, a broad-spectrum antibiotic − aiming the methicillin-resistant Staphylococcus aureus (MRSA) − for the treatment of complicated skin infections and nosocomial pneumonia. Johnson and Johnson had licensed the drug from Swiss drug company Basilea Pharmaceuticals in 2005.

Johnson and Johnson received a complete response letter (CRL) from the US Food and Drug Administration (FDA), delaying the approval process further. According to the FDA, there were many flaws in the trials due to which the company has been asked to conduct new studies to evaluate the drug's safety and effectiveness. Johnson and Johnson intends to discuss its future course of action related to ceftobiprole with the FDA shortly.

The new drug application (NDA) for ceftobiprole has been pending since May 2007. The approval has been getting delayed due to the presence of protocol related issues from initial stages. In November 2008, the FDA issued a CRL recommending additional site audits to be conducted. Following this, the company completed the audits through a third party, the results of which were submitted in June this year.

Ceftobiprole’s path to approval has not been smooth in the EU either. The review process has been halted until a Good Clinical Practice inspection is done. An opinion by the EU Committee for Medicinal Products for Human Use is anticipated in the first quarter of 2010. Given the repetitive delays in the approval process in both the US and EU, Basilea filed an arbitration claim against Johnson and Johnson in Feb 2009 seeking damages. The latest delay would increase the claims in the arbitration process.

On approval, ceftobiprole will have to compete with several established drugs, which include ViroPharma’s (VPHM) Vancocin, Theravance’s (THRX) Vibativ, Cubist Pharmaceutical’s (CBST) Cubicin, Pfizer’s (PFE) Zyvox and Tygacil.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Johnson and Johnson received a complete response letter (CRL) from the US Food and Drug Administration (FDA), delaying the approval process further. According to the FDA, there were many flaws in the trials due to which the company has been asked to conduct new studies to evaluate the drug's safety and effectiveness. Johnson and Johnson intends to discuss its future course of action related to ceftobiprole with the FDA shortly.

The new drug application (NDA) for ceftobiprole has been pending since May 2007. The approval has been getting delayed due to the presence of protocol related issues from initial stages. In November 2008, the FDA issued a CRL recommending additional site audits to be conducted. Following this, the company completed the audits through a third party, the results of which were submitted in June this year.

Ceftobiprole’s path to approval has not been smooth in the EU either. The review process has been halted until a Good Clinical Practice inspection is done. An opinion by the EU Committee for Medicinal Products for Human Use is anticipated in the first quarter of 2010. Given the repetitive delays in the approval process in both the US and EU, Basilea filed an arbitration claim against Johnson and Johnson in Feb 2009 seeking damages. The latest delay would increase the claims in the arbitration process.

On approval, ceftobiprole will have to compete with several established drugs, which include ViroPharma’s (VPHM) Vancocin, Theravance’s (THRX) Vibativ, Cubist Pharmaceutical’s (CBST) Cubicin, Pfizer’s (PFE) Zyvox and Tygacil. Additionally, companies such as Forest Laboratories/AstraZeneca (FRX/AZN) are developing candidates for this market. We are Neutral on Johnson and Johnson.

Chicago, IL – December 29, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: AstraZeneca (AZN), Pfizer (PFE), Mylan Laboratories (MYL), Novartis (NVS) and Boston Scientific Corp. (BSX).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

FDA Backs Crestor’s Wider Use

AstraZeneca (AZN) received a positive opinion from the US Food and Drug Administration’s (FDA) Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC) regarding the expanded use of Crestor. AstraZeneca is seeking approval for Crestor to treat patients with normal cholesterol levels but having other risks of heart disease. The committee voted 12-4 in favor of Crestor after analyzing its benefit against possible risk in some patients. However, they were concerned that Crestor should not be used at random in patients with low risk.

Following the recommendation, AstraZeneca has moved one step closer to FDA approval. Although the FDA is not required to follow the committee’s opinion, it generally does so.

The panel’s recommendation was based on data presented from the JUPITER (Justification for the Use of statins in Prevention: an Intervention Trial Evaluating Rosuvastatin) study conducted with 18,000 patients. It was observed that Crestor lowered deaths, heart attacks and strokes in middle-aged people (above 50 years) with normal cholesterol level having heart disease.

Crestor is one of AstraZeneca’s key drugs logging sales of about $3.6 billion last year. The FDA approval is likely to increase the targeted patient population which in turn should boost sales. Wider application means Crestor will be able to target about 6.5 million new patients who were not taking cholesterol lowering drugs. However, the future growth trajectory of Crestor may not be that smooth since Pfizer’s (PFE) Lipitor will lose patent exclusivity in 2011. This will increase competition in the cholesterol lowering market with the entry of generics.

In addition, AstraZeneca is tied in litigation with seven generic drug companies including Mylan Laboratories (MYL), Sandoz, the generics arm of Novartis (NVS) and Apotex among others who have challenged Crestor’s patent. The trial is likely to begin in Feb 2010.

BSX Settles DOJ Investigation

Boston Scientific Corp. (BSX) recently settled the U.S. Department of Justice (DOJ) investigation pertaining to certain post-market surveys conducted by Guidant Corporation before being acquired by Boston Scientific in 2006. Per the terms of the settlement, Boston Scientific has agreed to pay $22 million to DOJ, which was already being fully accrued. The investigation began in 2005.

Boston has also decided to enter into a Corporate Integrity Agreement (CIA) with the Office of Inspector General for the U.S. Department of Health and Human Services that requires enhancements to certain compliance procedures related to financial arrangements with health care providers. These enhancements are related to Boston’s cardiac rhythm management business which it had acquired from Guidant.

We think that the expense of $22 million in relation to the DOJ investigation will have minimal impact on Boston ’s bottom-line. The company reported a strong third quarter in fiscal 2009. Earnings per share were 19 cents, considerably ahead of the Zacks Consensus Estimate of 14 cents and the year-ago earnings of 16 cents. Total revenues were $2,025 million, an increase of roughly 2% year over year.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

The DAR-312 trial was conducted with 849 patients who were randomized to receive darusentan (in three dosage forms of 50, 100 or 300 mg once daily), an active comparator (guanfacine 1 mg once daily) or placebo. The drug was being studied for its effectiveness to improve systolic and diastolic blood pressure compared to placebo. However, results revealed that the improvement was not statistically significant though the study met other secondary endpoints. The loss of darusentan is a major blow to Gilead's diversification strategy away from its HIV franchise.

While we are disappointed with the failure of Gilead’s hypertension drug, we are awaiting the US Food and Drug Administration’s (FDA) decision on the company’s inhalable aztreonam for the treatment of lung infection caused by Pseudomonas aeruginosa (P. aeruginosa) in patients with cystic fibrosis (CF). Recently, the drug received favorable opinion from the FDA’s advisory committee.

Approval of aztreonam will strengthen Gilead’s non HIV portfolio. Earnings over the past few quarters have been above expectations specifically on strong sales of the HIV franchise. Following the release of third quarter results, Gilead increased its revenue guidance for 2009. Net product revenues are now expected to be approximately $6.35 billion, up from the earlier guidance of $6.1 billion – $6.2 billion. We have a Neutral recommendation on the stock.

Following the recommendation, AstraZeneca has moved one step closer to FDA approval. Although the FDA is not required to follow the committee’s opinion, it generally does so.

The panel’s recommendation was based on data presented from the JUPITER (Justification for the Use of statins in Prevention: an Intervention Trial Evaluating Rosuvastatin) study conducted with 18,000 patients. It was observed that Crestor lowered deaths, heart attacks and strokes in middle-aged people (above 50 years) with normal cholesterol level having heart disease.

Crestor is one of AstraZeneca’s key drugs logging sales of about $3.6 billion last year. The FDA approval is likely to increase the targeted patient population which in turn should boost sales. Wider application means Crestor will be able to target about 6.5 million new patients who were not taking cholesterol lowering drugs. However, the future growth trajectory of Crestor may not be that smooth since Pfizer’s (PFE) Lipitor will lose patent exclusivity in 2011. This will increase competition in the cholesterol-lowering market with the entry of generics.

In addition, AstraZeneca is tied in litigation with seven generic drug companies including Mylan Laboratories (MYL), Sandoz, the generics arm of Novartis (NVS) and Apotex, among others who have challenged Crestor’s patent. The trial is likely to begin in Feb. 2010.

The approval of Prevnar 13 was based on data from 13 phase III studies carried out on more than 7,000 children. Earlier, in Sep, Prevnar 13 received a positive opinion from the European Medicines Agency’s (EMEA) Committee for Medicinal Products for Human Use (CHMP). Moreover, the vaccine received priority review status from Health Canada earlier this year.

Prevnar 13 is a new version of the currently available pneumococcal vaccine. Prevnar is one of the best selling vaccines worldwide with sales of about $2.7 billion in 2008. While Prevnar treats illness caused by 7 strains of pneumococcal bacteria, the new vaccine is expected to block 13 strains including the original 7. It is estimated that Prevnar 13 would cover 92% of invasive pneumococcal disease, compared to 81% covered by Prevnar. The company is currently seeking approval for Prevnar 13 in about 60 countries spanning six continents and has already been approved in four countries.

Prevnar 13 is yet to receive approval from the US regulators. The vaccine received a positive recommendation from the US Food and Drug Administration’s (FDA) Vaccines and Related Biological Products Advisory Committee in Nov 2009. The FDA is reviewing the Biologics License Application (BLA) for Prevnar 13, which has an action date of Dec 30, 2009. Though the FDA was initially expected to respond by Sep 30, 2009, the agency had pushed back the approval date by 90 days.

Prevnar 13 is being studied in global phase III clinical trials for the prevention of pneumococcal disease in adults with submissions to regulators expected in 2010. Meanwhile, GlaxoSmithKline (GSK) received the European approval for its pediatric 10-valent vaccine, Synflorix (meant for children aged 6 weeks to 2 years), in Mar 2009 which will compete with Prevnar and Prevnar 13. However, GlaxoSmithKline does not plan to launch the vaccine in the US.

The acquisition involves Orchid's beta-lactam antibiotics (a class of drugs with a wide spectrum of antibacterial activity) manufacturing complex (comprising cephalosporin, penicillin and carbapenem facilities) and pharmaceutical research and development (R&D) facility at Irungattukottai, Chennai, as well as its generic injectable product portfolio and pipeline.

The manufacturing site has necessary approvals from international regulatory authorities, including the US Food and Drug Administration (FDA). Additionally, both the companies have signed a long term agreement under which Orchid will supply active pharmaceutical ingredients (APIs) for the acquired generic injectable pharmaceuticals business.

The relationship between Hospira and Orchid dates back to 2005 with a commercialization and development agreement between Mayne Pharma (now a part of Hospira) and Orchid. Thereafter, many such deals have strengthened the ties between the two companies.

Earlier this month, Hospira entered into an agreement with Australia-based ChemGenex Pharmaceuticals to license, develop and commercialize ChemGenex’s product candidate omacetaxine mepesuccinate in Europe, the Middle East and parts of Africa. The drug is meant to treat patients with chronic myeloid leukemia (CML) who are not responding to the current available treatment with imatinib mesyl. The marketing approval application of the drug is pending in both the US and Europe.

Apart from an initial payment of €11.1 million, Hospira might have to pay another €74.1 million as milestone payments based on a successful development and commercialization of the drug. In addition, ChemGenex will also receive a royalty on product sales in the specified areas of the agreement.

Hospira has been eyeing small deals to expand its generic injectables business as well as its geographic presence. The company has a leading position in this market – it owns about 23% of the roughly $11 billion global generic injectables market. We believe these deals will further strengthen its top line in due course.

The acquisition involves Orchid's beta-lactam antibiotics (a class of drugs with a wide spectrum of antibacterial activity) manufacturing complex (comprising cephalosporin, penicillin and carbapenem facilities) and pharmaceutical research and development (R&D) facility at Irungattukottai, Chennai, as well as its generic injectable product portfolio and pipeline.

The manufacturing site has necessary approvals from international regulatory authorities, including the US Food and Drug Administration (FDA). Additionally, both the companies have signed a long term agreement under which Orchid will supply active pharmaceutical ingredients (APIs) for the acquired generic injectable pharmaceuticals business.

The relationship between Hospira and Orchid dates back to 2005 with a commercialization and development agreement between Mayne Pharma (now a part of Hospira) and Orchid. Thereafter, many such deals have strengthened the ties between the two companies.

Earlier this month, Hospira entered into an agreement with Australia-based ChemGenex Pharmaceuticals to license, develop and commercialize ChemGenex’s product candidate omacetaxine mepesuccinate in Europe, the Middle East and parts of Africa. The drug is meant to treat patients with chronic myeloid leukemia (CML) who are not responding to the current available treatment with imatinib mesyl. The marketing approval application of the drug is pending in both the US and Europe.

Apart from an initial payment of €11.1 million, Hospira might have to pay another €74.1 million as milestone payments based on a successful development and commercialization of the drug. In addition, ChemGenex will also receive a royalty on product sales in the specified areas of the agreement.

Hospira has been eyeing small deals to expand its generic injectables business as well as its geographic presence. The company has a leading position in this market – it owns about 23% of the roughly $11 billion global generic injectables market. We believe these deals will further strengthen its top line in due course.

The FDA is concerned about the adverse events including post-injection anaphylactic reaction and pulmonary oil microembolism. In the CRL, the company has been asked to address these concerns. Additionally, the FDA has made it clear that it is not satisfied with the proposed Risk Evaluation and Mitigation Strategy (REMS) adopted by the company.

Aveed, known as Nebido outside the US, has been approved in 86 countries worldwide and is available in more than 50 countries across Europe, Asia Pacific and Latin America. The drug is sold outside the US by Germany’s Bayer AG (BAYRY). Endo licenses Aveed from Bayer.

For the past few months, Endo has been trying to build up its urology and endocrinology portfolio. In fact, Aveed was added to the company’s portfolio with the acquisition of Indevus Pharmaceuticals earlier this year. Thereafter, in August 2009, the company signed another agreement with UK-based ProStrakan Group Plc to acquire exclusive rights to commercialize Fortesta in the US, where the product is currently under FDA review. Fortesta is a 2% testosterone transdermal gel for testosterone replacement therapy in male hypogonadism. The drug is already available in Europe.

Hypogonadism is a common yet largely under-recognized and under-treated condition. It is estimated that about 13.8 million American men have testosterone levels that are below normal. However, only about 9% of these men are treated with testosterone replacement therapy.

Once launched, Fortesta and Aveed will compete with Auxilium Pharma’s (AUXL) Testim and Solvay Pharmaceuticals’ AndroGel.

Chicago, IL – December 10, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Texas Instruments (TXN), AutoZone, Inc. (AZO), International Business Machines (IBM), Marriott International Inc. (MAR) and Cell Therapeutics (CTIC).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday’s Analyst Blog:

Texas Instruments Raises Guidance

Texas Instruments (TXN) revised its revenue guidance to $2.90 billion-$3.02 billion, an increase of 1-5% from third quarter levels. This takes into account the $120 million seasonal decline in calculator revenue, as well as generally weaker baseband revenue, as the company phases out that business.

The guidance provided at the beginning of the quarter was for revenue of $2.78 billion-$3.02 billion or a decline of 3% to an increase of 5% sequentially. The previous guidance did look a bit conservative to us, so the revision does not come as a surprise. However, the reason for such conservatism is now clearer.

The company is seeing very strong demand, as customers, particularly in automotive, consumer and storage markets for computing are ramping up production. The greater-than-anticipated increase in some product categories is driving the inventory out of mix. This is slowing down production, depleting distributor inventories, extending lead times and resulting in lower revenue.

AutoZone Beats Estimates

AutoZone, Inc. (AZO) posted a 9.1% rise in profit for the first quarter of its fiscal 2010 ended Nov. 21, 2009, driven by expanded parts coverage as well as an improved commercial sales force and hub operating model. The Memphis, Tennessee-based specialty retailer and distributor of automotive replacement parts and accessories showed an earnings per share (EPS) of $2.82, beating the Zacks Consensus Estimate of $2.66. The EPS also improved from the year-ago level of $2.23.

Net sales increased 7.5% to $1.6 billion, while domestic same-store sales (sales for stores open for at least one year) rose 5.6% during the quarter. Gross profit as a percentage of sales went up to 50.3% from 50.1% in the year ago quarter. Gross margin increased by 20 basis points due to the leverage of distribution costs from lower fuel charges as well as improved efficiencies.

AutoZone's inventory advanced 3.5% due to new store openings. However, inventory per store declined to $508,000 from $512,000 last year. Net inventory -- merchandise inventories less accounts payable -- decreased on a per-store basis to $17,000 from $43,000 in the previous year.

IBM Inks Deal in Latin Markets

International Business Machines (IBM) announced a $200 million software agreement with Consist Software Solutions Inc., a leading provider of information technology applications to large and medium-sized companies throughout Latin America. The company chose IBM to help clients transform their businesses and reduce operational costs.

Consist Software Solutions have agreed to standardize all of its products to run on IBM technology, including its DB2 database and Websphere family of middleware products. Consist will provide its clients in the financial services, telecommunications, energy and utilities, government and healthcare industries with new software applications that embed IBM's software portfolio to support new IT infrastructure projects.

This deal is one of the largest for IBM in emerging Latin American markets such as Brazil, and shows that emerging markets remain a notable bright spot for the technology industry.

Marriott Provides Better Guidance

Marriott International Inc. (MAR) has provided a better guidance for the fourth quarter of 2009. The company now expects to add around 38,000 rooms to its worldwide lodging system by the end of 2009. This is up from its previous guidance of gross addition of 33,000 rooms for 2009, which was provided along with its third quarter earnings release in October 2009.

Marriott has also updated its guidance by two percentage points for systemwide revenue per available room (REVPAR) outside North America. The company now expects its systemwide REVPAR to decline by 14% - 16% in the fourth quarter of 2009. However, systemwide REVPAR inside North America is expected to remain in line with the previous guidance of a decline of 13% - 16%.

Marriott has also provided a better outlook for its timeshare business. The company now expects its contract sales of timeshare intervals in the fourth quarter of 2009 to be somewhat better than the previous guidance of $185 million to $190 million. This improvement will be driven primarily due to the realization of a $37 million gain from its note sale securitization during the current fourth quarter and better-than-expected rental profits

Cell Therapeutics’ Positive Data

Cell Therapeutics (CTIC) announced positive data from the pivotal phase III EXTEND (PIX 301) clinical trial of pixantrone in relapsed or refractory, aggressive non-Hodgkin's lymphoma (NHL) patients who have not responded to 2 or more prior therapies. The data were presented at the 2009 American Society of Hematology (ASH) Annual Meeting. Analysis of the additional follow-up data supports the initial clinical trial results.

We are pleased to note that for patients in follow-up period for at least 9 months from the end of treatment, pixantrone provided a 250% relative improvement in 1 year progression free survival or PFS (21% vs 6%) over comparator and a 115% increase in median overall PFS (5.6 months vs 2.6 months). Moreover, at 21 months post treatment, 14% of pixantrone patients remained free from disease progression compared to 3% in the comparator arm.

As a reminder, in August 2009, the US Food and Drug Administration (FDA) accepted for review the New Drug Application (NDA) filed by Cell Therapeutics. The company is seeking FDA approval (NDA filed in June 2009) for pixantrone for the treatment of relapsed and refractory NHL. The company was granted a ten month standard review and has been assigned a Prescription Drug User Fee Act (PDUFA) date of April 23, 2010.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

We are pleased to note that for patients in follow-up period for at least 9 months from the end of treatment, pixantrone provided a 250% relative improvement in 1 year progression free survival or PFS (21% vs 6%) over comparator and a 115% increase in median overall PFS (5.6 months vs 2.6 months). Moreover, at 21 months post treatment, 14% of pixantrone patients remained free from disease progression compared to 3% in the comparator arm.

As a reminder, in August 2009, the US Food and Drug Administration (FDA) accepted for review the New Drug Application (NDA) filed by Cell Therapeutics. The company is seeking FDA approval (NDA filed in June 2009) for pixantrone for the treatment of relapsed and refractory NHL. The company was granted a ten month standard review and has been assigned a Prescription Drug User Fee Act (PDUFA) date of April 23, 2010.

We believe positive data from the follow up study should weigh in the company’s favor when the FDA meets to decide on the drug’s approvality. However, we remain concerned about Cell Therapeutics’ liquidity position. Cash and cash equivalents including securities available for sale at the end of the third quarter were $54.9 million. The company is under great pressure to raise additional cash to fund its operations, especially at a time when it is preparing for the potential launch of pixantrone in 2010.

During the quarter, Cell Therapeutics reduced debt through the exchange of $4.5 million principal in debt for common stock resulting in a total of $57.4 million principal reduction in debt through exchanges so far in 2009. Although the company has brought down its debt burden by exchanging it against common stock, we remain concerned about significant dilution in shareholder value.

Chicago, IL – December 7, 2009 – Zacks Equity Research highlights Tiffany & Co. (TIF) as the Bull of the Day and Energy Transfer Partners (ETP) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Eli Lilly & Co.(LLY), Bristol-Myers Squibb (BMY) and Sanofi-Aventis (SNY).

Full analysis of all these stocks is available at http://at.zacks.com/?id=5506

Here is a synopsis of all five stocks:

Bull of the Day:

Tiffany & Co. (TIF) is well positioned to deliver robust sales and earnings growth by leveraging capital investments made in the past several years. The company holds a significant position in the world jewelry market and is poised to benefit from its increased geographic reach once the economy rebounds.

However, to weather the downturn, it is concentrating more on smaller size store formats that offer selected collections of lower priced higher-margin products. It is also paring its cost structure to protect the shrunken revenue base.

These initiatives helped Tiffany post improved third-quarter 2009 results prompting management to raise earnings guidance. We, in turn, have upgraded our recommendation to Outperform.

Bear of the Day:

Our Underperform recommendation on Energy Transfer Partners (ETP) units takes into account the bearish outlook for pipeline operators. While the partnership's liquidity position is sound, we continue to believe that the near- to medium-term outlook for its natural gas gathering and processing business remains weak.

Weighed down by these factors, Energy Transfer posted a third-quarter 2009 loss. The partnership's low growth and seasonal propane business also remain a major liability, in our view.

Given these headwinds, we expect Energy Transfer units to be under pressure in the medium- to long-term. The partnership's discount valuation relative to the pipeline MLP group reflects its heightened risk profile.

Latest Posts on the Zacks Analyst Blog:

Lilly’s Effient Proves Its Worth

Recently, Eli Lilly & Co.(LLY) Effient (prasugrel) received a major boost when it was added as a treatment option in two clinical guideline updates. These were for patients receiving percutaneous coronary intervention (PCI) and for patients with ST elevation myocardial infarction (STEMI), or severe heart attack. The guideline updates have been jointly developed by the American Heart Association (AHA), the American College of Cardiology (ACC), and the Society for Cardiovascular Angiography and Interventions (SCAI).

Effient, co-developed by Eli Lilly and Daiichi Sankyo of Japan, received the US Food and Drug Administration’s approval in July 2009 to lower the chance of having another thrombotic cardiovascular event (such as heart attack or stent-related blood clot) for patients with acute coronary syndromes (ACS) who are managed with angioplasty and stenting, also known as PCI. PCI usually includes the placement of a stent to help keep the artery open.

In addition, positive data related to Effient’s effectiveness in diabetic patients were presented at the American Heart Association 2009 Scientific Sessions held last month. It was observed that patients with type II diabetes mellitus who also had coronary artery disease (CAD) had significant better results with Effient compared to Plavix (clopidogrel) marketed by Bristol-Myers Squibb (BMY) and Sanofi-Aventis (SNY).

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5508.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5509.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

The FDA approval is based on encouraging data from a double-blind, placebo-controlled trial carried out with GAD patients who had initially responded to treatment with Cymbalta (60-120 mg/day) during a 26-week study. Following a random selection of these patients, 216 of them received the drug while 213 were on placebo.

At the end of the trial, it was observed that the time for relapse of GAD was longer for patients taking Cymbalta compared to patients taking placebo. While the estimated probability of relapse at 26 weeks of maintenance treatment was 46.4% for placebo, it was 15% for Cymbalta. However, the study was not without any side effects – such as nausea, headache, dry mouth, diarrhea, dizziness, constipation, fatigue and increased sweating.

Generalized anxiety disorder is a chronic illness which affects nearly 7 million Americans at any given time. Symptoms of the disease include excessive worry or anxiety over a certain period (six months or longer), difficulties controlling worry, irritability, poor concentration, sleep disturbances, fatigue, restlessness and muscle tension. The state of the patient may worsen if left untreated.

Cymbalta is one of the key products in Lilly’s portfolio. During the third quarter of 2009, it recorded sales of $790 million, up 10% compared to the year ago period. We expect the approval for additional indications will boost its sales further.

As per the CRL, Theravance will have to submit additional data and analyses for the NP patient population. While the telavancin NP clinical trials included clinical response as the primary endpoint and all-cause mortality as a secondary endpoint, the FDA has asked the company to evaluate data with all-cause mortality as the primary efficacy endpoint.

In addition, the CRL issued by the FDA requested further rationale for the pooling of data from the two ATTAIN studies, noted the need for a pediatric drug development plan for the NP indication and a customary safety update. We hope Theravance succeeds in presenting satisfactory data, else the New Drug Application (NDA) for Vibativ would either be rejected or the company may have to conduct additional studies. However, we are pleased to note that the company has stated that it has already collected the required information and has completed analysis to respond to the FDA.

Earlier, in September, Vibativ received FDA approval for the treatment of complicated skin and skin structure infections (cSSSI) caused by Gram-positive bacteria. Thereafter, the drug was launched in the US in November. Vibativ has been jointly developed with Astellas Pharma of Japan. While the drug will be marketed and sold by Astellas, Theravance will receive royalties on global sales. In the US, the company will help Astellas in marketing the drug for the first three years post approval. We are Neutral on the stock.

Data from the first trial – GOlimumab After Former anti-TNF (tumor necrosis factor) Therapy Evaluated in RA (GO-AFTER) revealed that patients previously treated with TNF inhibitors (adalimumab, etanercept or infliximab) responded as well as showed continued response to the drug for an entire year. At week 52, data measured by American College of Rheumatology (ACR 20) response found a 20% improvement in arthritis symptoms in 63% of patients receiving the drug while 41% of the patients achieved a 50% improvement in arthritis symptoms measured by ACR 50 response.

Results from the second trial - GOlimumab FOR subjects With Active RA Despite Methotrexate (GO-FORWARD) study proved the effectiveness of Simponi in patients with active RA despite prior treatment with methotrexate. Like the earlier trial, this trial also presented positive results for Simponi. At week 52, 64% of patients taking the drug and methotrexate achieved ACR 20 response while 25% achieved a 70% improvement in arthritis symptoms as measured by ACR 70 response. Both these studies were carried out with Simponi in 50 mg dosage as a once-monthly subcutaneous injection.

Earlier in April 2009, Simponi received approval from the US Food and Drug Administration and Health Canada approved Simponi for the treatment of moderate to severe active RA, active psoriatic arthritis (PsA) and active ankylosing spondylitis. Thereafter, in October 2009, the drug received approval from the European Commission as well.

As a reminder, on May 27, 2009 Johnson & Johnson announced an arbitration demand against Schering-Plough (now a part of Merck, MRK) requesting a ruling regarding the ex-US rights of Remicade and Simponi. J&J developed both compounds and licensed marketing rights outside the US to Schering-Plough. However, J&J contends that the merger between Schering-Plough and Merck has triggered a change of control provision in the licensing agreement, resulting in its termination, thereby returning full rights to the compounds to J&J.
 
Remicade is approved for 15 indications in the US alone including RA. Remicade generated almost $5.9 billion in worldwide revenues in 2008, including $2.1 billion in sales outside the US, which Schering-Plough booked as revenues. The pending case is of great importance to both companies given the sales contribution from the product. We are Neutral on J&J.

The reported quarter had been quite significant for Theravance with the company receiving US Food and Drug Administration (FDA) approval for its long awaited product Vibativ for the treatment of complicated skin and skin structure infections (cSSSI) caused by Gram-positive bacteria. While the drug will be marketed and sold by Astellas, Theravance will receive royalties on global sales. In the U.S., the company will help Astellas in marketing the drug for the first three years post approval.

Vibativ is expected to be launched in the U.S. by year end. Thus we believe, from 2010 onwards, Theravance’s top line will get a boost from the royalties on sales of the drug.

Apart from cSSSI, Vibativ is also being studied for hospital-acquired pneumonia (HAP). The company has already submitted a New Drug Application (NDA) for this indication and has been assigned a Prescription Drug User Fee Act (PDUFA) date of Nov. 26. We believe a favorable decision from the agency will increase the patient base thereby improving the sales potential of the drug. However, management is not quite optimist about a decision in 2009 and expects it to be extended to 2010.

Another promising pipeline candidate at Theravance is a next-generation combination treatment for patients with chronic obstructive pulmonary disease (COPD). Yesterday itself, the company announced the commencement of the phase III trial of the program, which is being developed under a partnership with GlaxoSmithKline. We have a Neutral rating on the stock.

Chicago, IL – October 23, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Wal-Mart (WMT), Capital One (COF), Merck (MRK), GlaxoSmithKline (GSK) and Schering Plough (SGP).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Thursday’s AnalystBlog:

New Jobless Claims Up

This long-term unemployment is an insidious problem for the economy. People who are out of work for just a few weeks really don't have to cut back on their consumption that much, especially if they feel confident that they will have a new job in a short time.

People who are seeing even their emergency extended benefits expire are not going to be spending an lot of money at Wal-Mart (WMT) or anywhere else for that matter. For a little while they can make due by running up their credit cards, but if a job doesn't come along it just means a much bigger default for the big credit card companies like Capital One (COF).

If the stimulus bill had not passed, there would have been more than 3.8 million people (and their families) who would have been devoid of any income for months now. Next time you hear someone say the stimulus bill is not working, ask them to look one of those people in the eye and say it. Ask them how much lower retail sales would have been if those 3.8 million-plus families were not even able to shop for absolute necessities like food.

Merck Beats, Raises Outlook

Merck’s (MRK) earnings for the third quarter came in at 90 cents per share, which was ahead of the Zacks Consensus Estimate of 82 cents, driven by continued growth of its key products and strict cost management. The company reported revenues of $6 billion, up 2% from the same period in 2008. Revenue would have higher, but for the unfavorable foreign exchange movement, which affected global sales by 3%.

Weaker-than-expected sales of Gardasil were offset by significantly stronger-than-anticipated Singulair revenues. Although the US Food and Drug Administration (FDA) asked for additional precautions regarding the risks associated with the use of Merck’s lead product Singulair (as well as other leukotriene inhibitors), including suicide and depression, the drug recorded an increase of 5% compared to the third quarter of 2008.

Gardasil, Merck’s cervical cancer vaccine, recorded yet another quarter of lower sales. The company recorded $311 million in sales of the vaccine, down 22% from the year-ago period. Recently, the vaccine received FDA approval to be used in boys and young men in the age group of 9-26 years for the prevention of genital warts. However, sales are likely to be hampered as the FDA approval of GlaxoSmithKline’s (GSK) cervical cancer vaccine, Cervarix, will intensify competition further.

Cholesterol franchise sales, consisting of Vytorin and Zetia under Merck’s partnership with Schering Plough (SGP), continued to decline in the reported quarter as well. While sales were down 7% year over year in the third quarter, in the second quarter, they were down 10%. Isentress, the company’s product for HIV infection recorded an increase of 84% to $197 million during the quarter. The drug is expected to record increased sales with the recent FDA and EU approval for the drug’s use in previously untreated patients as well.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Chicago, IL – October 22, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: US Bancorp (USB), Visa Inc. (V), Genzyme Corp (GENZ), Shire plc (SHPGY) and Protalix BioTherapeutics Inc. (PLX).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday’s AnalystBlog:

US Bancorp Exceeds Estimates

US Bancorp (USB) has reported third quarter earnings of $603 million or 30 cents per share. Results were ahead of the Zacks Consensus Estimate of 26 cents, and reflected higher revenue and an increase in fee income.

However, credit losses and nonperforming assets continued to trend higher in the quarter, reflecting continued stress in the commercial, commercial real estate, residential real estate and consumer loan portfolios. We note that the rate of deterioration has somewhat moderated in the quarter.

Quarterly results were, however, impacted by a $415 million of provision for credit losses in excess of net charge-offs, net securities losses of $76 million and a gain of $39 million associated with the company’s investment in Visa Inc. (V). These items reduced earnings by 19 cents per share.

Results for the quarter were driven by record total net revenue of $4.3 billion, representing an increase of 2.2% sequentially and 25.8% year-over-year. Results reflected a growth in interest income and fee income.

Credit metrics continued to deteriorate in the quarter, though the rate of deterioration has moderated. Net charge-offs were 227 basis points (bps) of average loans outstanding, up 24 bps sequentially and 108 bps year-over-year.

Non-performing assets as a percentage of related assets were 2.39%, up 19 bps sequentially and 151 bps year-over-year. As a result, provisions for credit losses increased to $1.5 billion from $1.4 billion reported in the prior quarter and $748 million in the year-ago period.

Genzyme Misses & Slashes

This morning, Genzyme Corp (GENZ) reported third quarter earnings of 19 cents per share, which was well below the Zacks Consensus Estimate of 31 cents and the year ago earnings of 93 cents. Moreover, revenues declined 9% to $1.06 billion.

As expected, the temporary shutdown of the company’s Allston manufacturing facility earlier this year impacted overall financial results. Although the company has resumed production at this facility, the temporary shutdown led to a disruption in the supply of key products Cerezyme and Fabrazyme.

Cerezyme’s performance was highly affected with sales dropping 69.7% to $93.6 million in the reported quarter. Fabrazyme sales came in at $115.2 million, down 8% from the prior-year quarter. Genzyme expects to resume supply of new lots of Cerezyme and Fabrazyme from late November and late December, respectively. The company believes it will be in a position to meet anticipated demand for both products in the first quarter of 2010.

However, we believe Cerezyme, which is approved for the treatment of Gaucher disease, could lose some share to Shire plc’s (SHPGY) velaglucerase alfa and Protalix BioTherapeutics Inc.’s (PLX) Uplyso, both of which are currently available under the US Food and Drug Administration’s (FDA) expanded access program.

We believe the availability of these two products, which have yet to receive FDA approval, could eat into a part of Cerezyme’s patient base. Once launched, both products will compete directly with Cerezyme. Although Genzyme holds a leading position in the treatment of Gaucher disease, the patient population for the disease is not large. As such, the entry of additional players in the market could restrict its growth opportunities in the future.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Spectrum received a Complete Response Letter (CRL) from the FDA, in which the agency stated that the Fusilev data did not confirm the drug’s non-inferiority to leucovorin. Spectrum Pharmaceuticals plans to request a meeting with the agency to discuss the future course of action. The drug is currently approved by the FDA as a treatment option after high dose of methotrexate therapy in patients with osteosarcoma, a type of bone cancer.

Earlier in September, the company raised $50 million in a registered direct offering of shares and warrants priced at $7.55. We believe the funds were raised to support the increasing marketing activities associated with further penetration of Zevalin following the expanded approval of the drug.

As a reminder, Zevalin had received FDA approval for an expanded label for the treatment of patients with previously untreated follicular non-Hodgkin's lymphoma (NHL), who achieve a partial or complete response to first-line chemotherapy. This new and expanded application supplements the 2002 FDA approval of the drug as treatment for patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin's lymphoma.

While the additional indication for Zevalin is a positive development for the company, we remain concerned about the future of Fusilev. The drug’s approval would have provided a strong impetus to its sales as colorectal cancer is the fourth most common cancer in men and the third most common cancer in women worldwide. With more than 630,000 deaths worldwide per year, it is the second leading cause of cancer-related death in the Western world.