Optimer Pharma Faces Competition
Optimer Pharmaceuticals, Inc. (OPTR) is a biopharmaceutical company specializing in anti-infective drug development and commercialization.
The company has two phase III drug candidates: Difimicin for Clostridium difficile-associated diarrhea (CDAD), and Prulifloxacin for infectious diarrhea. Although we are optimistic about the prospect of both Difimicin and Prulifloxacin in terms of their clinical trial results and FDA approval, we are very concerned about the competition in the CDAD and infectious diarrhea markets as both drug candidates face intense competition from both big pharmaceutical companies such as Pfizer (PFE) and Bayer and smaller biotech companies like ViroPharma (VPHM) and Salix Pharma (SLXP).
In addition to competition from branded products, Difimicin and Prulifloxacin also face competition from generic antibiotics. The company ended 2Q08 with cash and equivalent of $44.2 million. We believe that the company's cash position can only last through 2009. We maintain our Hold rating on Optimer with price target of $9.50. We expect the stock to trend sideways in the next 6 to 12 months.
We arrive at our price target by using a P/S (price-to-sales) ratio of 18x, multiplied by our estimated 2011 revenue of $43 million, discounted at 25% for 2 and half years. Risks associated with our price target include any possible approval delay of Difimicin or Prulifloxacin by the FDA. Upside to our price target may come from the positive phase III trial results for Difimicin and Prulifloxacin.
CREE Sees Bright FQ1
Shares of
Cree, Inc. (
CREE) have advanced approximately 14% after the LED light maker offered a bullish guidance for its fiscal first quarter and a solid performance for its fiscal fourth quarter.
Earnings estimates for this year, which ends in June 2009, are up 7.5% in the past 7 days, while expectations for the current quarter are up 22.2% in that time.
CREE forecasted profit and sales for the fiscal first quarter that were ahead of expectations. The fiscal fourth quarter saw a year-over-year revenue gain of 22% to $135.9 million and earnings per share that topped both the consensus and year-ago result.
Delphi Financial Misses Slightly
We maintain our Hold rating on the shares of Delphi Financial Group, Inc. (DFG), a holding company whose subsidiaries provide non-medical insurance products and services.
The company?s second-quarter operating results missed our expectations by seven cents, mainly due to disappointing investment results.
