Piper Jaffray Increases Their Price Target on OSI Pharmaceuticals (OSIP) to $58

July 24, 2008 9:11 AM EDT

Piper Jaffray increases their price target on OSI Pharmaceuticals (NASDAQ: OSIP) from $50 to $58 and maintains their Buy rating. The company remains on Piper Jaffray’s Alpha List.

The firm also raises their FY 08 EPS estimate from $2.07 to $2.17, and increases their FY 09 EPS estimate from $2.86 to $2.91.

The firm highlighted better-than-expected Q2 results driven by higher Tarceva sales, and said, “OSIP reported Q2 adjusted EPS of $0.61 versus our estimate of $0.48. Reported US Tarceva sales totaled $119mn and were slightly greater than our estimate of $114.6mn. Ex-US Tarceva sales, as reported by Roche, were $173mn, ahead of our estimate of $165.4mn. The company reported Tarceva-related revenues of $86.9mn, versus our estimate of $79.7mn, for a 9% y/y increase. R&D expenses were $30.4mn, slightly below our estimate of $32.8mn. SG&A was in line at $23.2mn (vs. $23.5mn). The company reiterated its expense guidance for R&D at $140mn at SG&A expense at approximately $95mn.�

Piper Jaffray's valuation assumes: "(1) re-acceleration of growth in Tarceva sales based on positive SATURN and BetaLung studies; and (2) minimal negative impact from the introduction of competing products in the NSCLC market."

OSI Pharmaceuticals, Inc., a biotechnology company, discovers, develops, and commercializes molecular targeted therapies for oncology, diabetes, and obesity in the United States and internationally.

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