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A Hold recommendation has recently been issued to biopharmaceutical company Replidyne, Inc. (RDYN) by Zacks senior healthcare industry analyst Grant Zeng, CFA. Here's what his latest update said:
'Replidyne, Inc. is a clinical stage biopharmaceutical company focused on the discovery, development, in-licensing, and commercialization of anti-infective products. The company's lead drug, Orapem, received a non-approvable letter from the FDA in October 2006. The drug is currently in confirmatory phase III trials and we expect to see data from the same by end 2008. However, this, among other things, keeps us on the sidelines. We initiate our coverage of the company with a Hold rating and a target price of $5.50.
'The company has faced some choppy times in the past year with the setback to Orapem, and the subsequent termination of the development agreement with Forest. The FDA's request for additional clinical trials for all indications using a superiority design versus placebo or an active comparator drug for the indications of ABS and AECB, more extensive microbiologic confirmation and consideration of alternate dosing regimens for Orapem has set the company's development plans back by at least three years. The latest we expect Orapem to be approved is in the second half of 2009 -- a significant delay considering that the company had first filed the NDA in January 2006.
'The company is currently in active partnership discussions, and we expect a positive announcement in this regard soon. Besides Orapem, the company has a thin pipeline, consisting of only REP8839 (phase II trials expected to begin by end 2007) and REP3123 (in preclinical development). We arrive at our target price of $5.50 by applying a P/S multiple of 5x to our 2010 revenue estimate of $61.4 million, discounted at 25 per cent for 3 years. Our model assumes 28.5 million shares outstanding in 2010.'
Read the full analyst report on RDYN.
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