Headquartered in Palo Alto, CA, CV Therapeutics, Inc. (CVTX) is a biopharmaceutical company focused on applying molecular cardiology to the discovery, development and commercialization of novel, small molecule drugs for the treatment of cardiovascular diseases. Several big regulatory decisions are expected for CVT in 2008. The first came in April 2008 with the approval of Lexiscan for MPI.
Also in April 2008, the CHMP/EMEA gave the thumbs up to Ranexa for sale in Europe. However, the big decisions are coming in July 2008 when the FDA is set to rule on three NDA/sNDAs for expanding the Ranexa label. Our call is that investors should Hold onto the shares at this level as fundamentals are improving.
The Street is pretty split on CVT right now. We are in the moderately positive camp, believing that Ranexa will eventually pick up steam after the label expansion(s). We remind investors, there are three separate applications here one for first-line angina, one for a potential anti-arrhythmic claim, and another for use in diabetics with coronary disease. The first-line angina sNDA and the anti-arrhythmic claim look solid in our view.
We are cautious on the full NDA in diabetics because this was a prospective analysis and not a primary statistically powered end point. The encouraging news is that the FDA has data from CARISA and MERLIN, and both look solid with respect to a 0.7% reduction in Hb A1c. All these decisions will be made on July 27, 2008. We also expect approval in the EU for Latixa (the EU trade name of Ranexa) by the end of June 2008.
Outside of Ranexa, things are progressing nicely. The approval of Lexiscan in April 2008 earned CVT a $12 million milestone payment from Astellas Pharmaceuticals. Management quickly monetized half of its expected royalty by selling the rights to TPG-Axon Capital for $185 million -- $175 million of which was upfront cash. This puts CVT in a solid financial situation heading into potential deal / alliance talks during the second half of the year.
If the above applications all pan out, CVT has excellent turnaround potential. The stock looks well supported at these levels and 2008 could be a pivotal year for management. CVT could easily head to $20 if things come together. Right now all we see is the potential that things could come together, and that keeps us at a Hold rating. If that potential starts to turn into a certainty, we would recommend buying the stock. Our target is $12.
Read the full analyst report on CVTX.
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