ZymoGenetics, Inc. (ZGEN) is a biopharmaceutical company focused on the discovery, development and commercialization of therapeutic proteins for the prevention or treatment of human diseases. Recent approval of rhThrombin by the FDA and the clinical progress made by the company will drive the value for the company.
We believe rhThrombin will provide significant boost to the company's top-line growth in the coming quarters. Other candidates should provide long-term growth for the company.
ZymoGenetics reported better than expected fourth quarter financial results. Revenue in fourth quarter was $20.5 million, much higher than our estimate of $9.3 million and than First Call consensus of $6.3 million. Net loss per share was -$0.56, versus our estimate of -$0.60, and consensus of -$0.70. The FDA recently approved ZymoGenetics rhThrombin for topical hemostasis in surgical procedures.
Although rhThrombin faces competition from plasma-derived thrombin products, rhThrombin has advantages over existing plasma derived thrombin. Therefore, rhThrombin will capture a fair market share in the thrombin market and will provide a significant boost to ZymoGenetics top line growth in the coming quarters. ZymoGenetics has a robust pipeline targeting a variety of diseases such as cancer, autoimmune disorders and hepatitis C.
We are impressed with the progress the company has made in the past quarter in terms of clinical development. We are expecting more data in 2008. With an approved product and a robust pipeline, we think the risk associated with ZymoGenetics has been greatly reduced and current valuation is attractive. Therefore, we maintain a Buy rating on the company's shares with a price target of $16.
Read the full analyst report on ZGEN.
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