Pozen Shares Make Modest Recovery From Friday Fall; Analysts Predict Approval for New Drug

NEW YORK - Positive news from analysts sent shares of drug maker Pozen Inc. climbing higher in Monday morning trading, a welcome recovery after Friday's plunge, which was precipitated by news that the Food and Drug Administration wants more information on the company's new migraine-relief medicine.

Shares of Pozen, which specializes in pain and migraine relief drugs, rose 44 cents, or 8 percent, to $5.96 on the Nasdaq in recent trading. The stock closed Friday's session at $5.52, after plummeting to a 12-month low of $5.26 from $13.90. In March, the stock reached a year high of $18.62.

On Friday, the Food and Drug Administration said it would not approve migraine treatment Trexima until Pozen provides additional safety information, which may require new studies. Pozen and development partner GlaxoSmithKline PLC said in a statement that the agency issued an approvable letter on the drug, but also requested the added data.

Kevin Scotcher, an analyst with HSBC Global Research, upgraded the stock to "Overweight" from "Neutral." However, he reduced his target price to $11.50 from $15.50 to reflect a newly expected delay in FDA approval for the drug.

Analyst Eun K. Yang with Jefferies and Company Inc. wrote in a Monday note to clients that the stock is oversold. Yang predicts the drug will not cause any serious safety issues because its main ingredients are two already marketed pain relieving drugs, though he noted that the exact nature of the FDA's inquiry is unknown.

Yang rated the stock at "Buy" and also lowered his price target to $15 from $20. He predicts Trexima, which is Pozen's lead product candidate, will be on the market in early 2008, about 15 months later than previously anticipated.

American depositary shares of GlaxoSmithKline slipped 2 cents to $54.63 on the New York Stock Exchange.