With backlog increasing significantly in Q1, we do not expect results to fall short of the guidance. We expect continued revenue growth, as new product platforms gain traction. Thus, we are reiterating our Buy rating on the shares.Management is focused on infrastructure build-up, better product definition and timely introduction and design-in of new products. New platforms in power management are expected to increase revenue and expand margins in the back half of the fiscal year. Both orders and backlog were up strongly, indicating a revenue pickup despite the macro softness.

Shares of Semtech are currently trading at a 15.8x multiple of price to our current 2009 earnings estimate (P/E). We expect the shares to trade higher within the next six months. Consequently, we are setting a target price of $20 (20.8x P/E) and recommending investors to accumulate shares.

Impressive Pipeline for Eurand Bio

We are optimistic about Eurand N.V.'s (EURX) drug formulation technologies. We believe the company will continue to monetize these technologies by establishing partnerships with major pharmaceutical and biotech companies going forward.

We are especially positive about Zentase, the company's lead drug candidate for the treatment of exocrine pancreatic insufficiency. The U.S. Food and Drug Administration (FDA) issued an 'approvable' letter for Zentase in June. A timely response to this letter will ensure a launch of the drug in the second half of 2008.

We believe Zentase has the first-mover advantage over its competitors. The drug should achieve higher market penetration due to its excellent safety and efficacy profile compared to existing pancreatic enzyme products in the market.

Eurand's pipeline is robust with late-stage drug candidates for its partners, including muscle spasm drug Amrix. This drug has been approved by the FDA and is marketed by Cephalon Inc. (CEPH).
Eurand is amongst a handful of biopharmaceutical companies with a diversified revenue stream. The company is on track to achieve profitability in 2009. Current share price looks attractive and should be used to build positions in the stock. Therefore, we assign a Buy rating on its shares. Our price target is $18 which is based on 40x our estimated 2010 EPS of $0.64, discounted at 20 percent for two year.