(Source: Business Wire)
Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Ctrip.com International (NASDAQ: CTRP), ViroPharma (NASDAQ: VPHM), Internap Network Services Corporation (NASDAQ: INAP), Allergan, Inc. (NYSE: AGN) and Comstock Resources (NYSE: CRK).
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Here are highlights from Wednesday's Analyst Blog:
Ctrip.com Valuation Reasonable
Ctrip.com International (NASDAQ: CTRP) reported 4th quarter results that were slightly better than our estimates. However, the company's business outlook for 2009 was disappointing. Ctrip.com expects to have net growth of 5% to 10% in 2009. As a result, we are reducing our estimates for 2009 and 2010.
The company's near-term prospects have deteriorated because slowing global economic growth has reduced the demand for travel-related services, and that is hurting Ctrip.com's revenues and margins. Longer term, Ctrip.com is well positioned to generate solid growth as more Chinese consumers will use online travel-related services. We maintain our Hold rating on CTRP shares.
VPHM to Be a One-Trick Pony
In the past two years, we have seen both HCV-796 (for HCV) and maribavir (for CMV) fail clinical programs. These were two products that we previously believed would be on the market and contributing to ViroPharma's (NASDAQ: VPHM) top-line by 2011. Paramount to our investment these for ViroPharma was that all the cash being spun-off by Vancocin, an asset with a definite and rapidly approaching terminal economic life, would allow management to develop and commercialize the next wave of growth starting in 2010. With both HCV-796 and maribavir gone, ViroPharma will become a one-trick pony quickly after the arrival of generic oral vancomycin.
Despite our belief that Cinryze is an excellent product and was a fine acquisition by ViroPharma management, it has very different profitability characteristics than Vancocin. Yes, both products have peak sales at $250 million, but comparing the operating margins for Vancocin vs. Cinryze shows the later is a far less profitable drug. Besides the significantly lower gross margin for Cinryze vs. Vancocin (65% vs. 95%), Cinryze will require a specialty sales force four to five times the size, will require continued R&D investment, and will also require the implementation of a risk mitigating plan (REMS) and the Cinryze Solutions registry.
