Novacea Shares Rise As Analysts Begin Coverage With Unanimous Positive Ratings
NEW YORK -- Shares of Novacea Inc. rose Monday after a group of analysts initiated positive coverage on the biotech drug developer based on its experimental cancer treatments.
Novacea shares rose 41 cents, or 6.6 percent, to $6.61 in late morning trading on the Nasdaq. The stock began trading on May 11 priced at $6.50, and have traded between $6.01 and $7.37.
Investment firms Bear Stearns, Pacific Growth Equities, Cowen & Co., and HSBC all initiated coverage of the South San Francisco, Calif.-based company with Buy-grade ratings.
Analysts all pointed to mid-stage clinical data showing DN-101, when used along with Sanofi-Aventis SA's Taxotere, significantly lowering the risk of death and adverse events in advanced-stage prostate cancer patients.
In a note, Bear Stearns analyst Akhtar Samad fixed a target price of $10 and said that Novacea set itself apart from other small biotechs by conducting a large, controlled mid-stage clinical trial on the drug with Taxotere versus Taxotere alone. The analyst called the 49 percent improvement in survival time with both drugs "impressive," and forecast U.S. sales to peak at about $180 million in 2012.
Pacific Growth Equities analyst Gregory Wade took an even more optimistic view of the drug and set his sales forecast nearly four times higher. Wade estimates DN-101 sales of $647 million by 2011, with those approaching $1 billion by 2015.
Cowen & Co. analyst Eric Schmidt, who rates the company an "Outperform," said the treatment could transform the prostate cancer market.
HSBC analyst Gene Mack set a $12 price target, and estimated DN-101 would generate $149 million in first year sales after a 2010 launch with sales peaking between $540 million and $720 million.
Novacea is also developing a treatment for breast and lung cancer called vinorelbine, and a brain cancer treatment called AQ4N.
NEW YORK -- Shares of Novacea Inc. rose Monday after a group of analysts initiated positive coverage on the biotech drug developer based on its experimental cancer treatments.
Novacea shares rose 41 cents, or 6.6 percent, to $6.61 in late morning trading on the Nasdaq. The stock began trading on May 11 priced at $6.50, and have traded between $6.01 and $7.37.
Investment firms Bear Stearns, Pacific Growth Equities, Cowen & Co., and HSBC all initiated coverage of the South San Francisco, Calif.-based company with Buy-grade ratings.
Analysts all pointed to mid-stage clinical data showing DN-101, when used along with Sanofi-Aventis SA's Taxotere, significantly lowering the risk of death and adverse events in advanced-stage prostate cancer patients.
In a note, Bear Stearns analyst Akhtar Samad fixed a target price of $10 and said that Novacea set itself apart from other small biotechs by conducting a large, controlled mid-stage clinical trial on the drug with Taxotere versus Taxotere alone. The analyst called the 49 percent improvement in survival time with both drugs "impressive," and forecast U.S. sales to peak at about $180 million in 2012.
Pacific Growth Equities analyst Gregory Wade took an even more optimistic view of the drug and set his sales forecast nearly four times higher. Wade estimates DN-101 sales of $647 million by 2011, with those approaching $1 billion by 2015.
Cowen & Co. analyst Eric Schmidt, who rates the company an "Outperform," said the treatment could transform the prostate cancer market.
HSBC analyst Gene Mack set a $12 price target, and estimated DN-101 would generate $149 million in first year sales after a 2010 launch with sales peaking between $540 million and $720 million.
Novacea is also developing a treatment for breast and lung cancer called vinorelbine, and a brain cancer treatment called AQ4N.
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