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Jefferies Bullish on Cubist's (CBST) CXA-201; Raises PT to $44

June 2, 2011 9:52 AM EDT Send to a Friend
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Price: $69.03 --0%

Rating Summary:
    11 Buy, 10 Hold, 0 Sell

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Jefferies is increasing its price target on Cubist Pharmaceuticals (Nasdaq: CBST) from $36 to $44, while maintaining its Buy rating on the stock.

Jefferies comments that Cubist's CXA-201 "is potentially the most potent Gram-negative antibiotic in development, particularly for the most worrisome pseudomonas infections...CXA-201 is a combination of a new, rapidly-actericidal cephalosporin CXA-101 and marketed tazobactam. In vitro, CXA-101 showed ~99% pseudomonas susceptibility (vs. ~85% for 4th-generation cephalosporin, cefepime; ~84% for new carbapenem, doripenem) in addition to enhancing activity against beta-lactam-resistant Enterobacteriaceae strains."

Cubist's CXA-201 also has more pseudomona coverage, while Forst Labs (NYSE: FRX) CAZ-104 and CEF104 "have potency towards a relatively infrequent carbapenem-resistant strain of Klebsiella pneumoniae (KPC)."

The Phase III for CXA-201 is expected to commence before the end of the year. Phase II data is expected out in the third quarter.

Jefferies new price target consists of a fair value of about $38 per share for Cubicin and $6 per share for CXA-201, which is discounted at 11 percent annually. Jefferies estimates an acquisition price of $50 for Cubist.

For more analyst coverage on Cubist, click here. For a ratings summary, click here.

Cubist shares are trading 3 percent stronger in the early session.




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