Allos Upped to Outperform - Analyst Blog
22 March 2012 - 9:00PM
Zacks
We recently upgraded our
recommendation on Allos Therapeutics Inc. (ALTH)
to Outperform with a target price of $1.75. We believe that
the stock is undervalued at current levels.
Allos, a Westminster, Colorado
based company, announced decent fourth quarter and full year 2011
results in March 2012. The company suffered a loss of $0.01
per share in the quarter, narrower than the year-ago loss of $0.17
and the Zacks Consensus loss estimate of $0.08. A surge in revenues
coupled with lower costs led to the narrower loss in the final
quarter of 2011.
Sales of the company’s sole
marketed product, Folotyn for the treatment of patients with
relapsed or refractory peripheral T-cell lymphoma (PTCL) improved
in the quarter. Net sales of the product improved 17% sequentially
in the final quarter of 2011. The company expects Folotyn sales to
continue improving in 2012. 2012 sales of the product are projected
to improve 16%-28% over 2011 levels (after excluding some
infrequently occurring items).
Moreover, we are positive on the
deal inked by Allos in May 2011 with Mundipharma for the
co-development and commercialization of Folotyn. Per the terms of
the deal, the sole responsibility of commercializing the drug in
the US and Canada lies with Allos. Mundipharma is responsible for
commercializing Folotyn in the rest of the world. Mundipharma is
seeking approval of Folotyn for PTCL in countries such as
Australia, Switzerland and South Korea. Approval in additional
markets would strengthen the top-line.
Furthermore, we view the
termination of the deal with AMAG Pharmaceuticals
(AMAG) as a positive for Allos as it will be able to focus its
entire attention on marketing Folotyn more effectively. Moreover,
the merger did not have enough strategic rationale behind it in the
first place.
In view of these positives, we
believe that Allos is undervalued at current levels. We believe
that the current price represents an attractive entry point for
long term investors.
ALLOS THERAPEUT (ALTH): Free Stock Analysis Report
AMAG PHARMA INC (AMAG): Free Stock Analysis Report
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