Back in August 2008, Zacks senior pharmaceutical analyst Jason Napodano, CFA, initiated coverage of high-flying United Therapeutics Corporation (UTHR) with a Sell rating at nearly $110 per share. The negative recommendation gained significant attention considering UTHR's stock was up 50% over the prior six months, and 12 of the 15 analysts on the Street that cover the stock rated the shares a Buy. Jason's Sell call is one of only two negative opinions on the stock.
This morning, United Therapeutics Corp. released results from the FREEDOM-C clinical trial, a program designed to test an oral version of Remodulin (treprostinil) for the treatment of Pulmonary Arterial Hypertension (PAH), which failed to hit the primary endpoint. Remodulin is currently approved in both a subcutaneous and intravenous form.
Jason's negative call on the stock was based on his concerns that the FREEDOM-C program would fail, and that expectations for United Therapeutics were entirely too high.
In a separate announcement today, United Therapeutics agreed to pay Eli Lilly & Co. (LLY) $150 million to license the U.S. rights to Cialis (tadalafil), Lilly's blockbuster drug for erectile dysfunction (ED), for use in PAH. Given the mechanism of action, Cialis could have significant potential for use in hypertension. (Pfizer Inc.'s (PFE) ED drug, Viagra [sildenafil], is currently approved for use in PAH under the brand name Revatio.) In return, Lilly will make a $150 million equity investment in United Therapeutics.
United Therapeutics stock is down 36% on the news, currently trading at $57 per share. As of this morning, Jason's rating remains Sell.
Read the full analyst report on UTHR
Read the full analyst report on LLY
Read the full analyst report on PFE
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