Wedbush Upgrades ZymoGenetics (ZGEN) to Outperform; Believe ZGEN on Track to Meet 2010 Sales Estimates

November 6, 2009 9:38 AM EST

Wedbush upgrades ZymoGenetics, Inc. (Nasdaq: ZGEN) from Neutral to Outperform.

Wedbush analyst says, "RECOTHROM Q3/Q4 sales growth was 42%, which followed a 33% Q3/Q2 increase. We estimate that RECOTHROM sales can grow an average of 23% Q/Q for the next five quarters, by our estimates, to reach our 2010 sales estimate of $74.5 million. With greater than $50 million in anticipated 2010 sales, RECOTHROM has achieved a level of sales which makes the asset far more attractive to either ZGEN or another party. Based on the strong sales growth in Q2:09 and Q3:09, and our assessment of future sales growth, we are upgrading ZGEN to Outperform."

"ZGEN previously announced that King Pharmaceuticals (NYSE: KG) has filed a lawsuit claiming that ZGEN has engaged in unfair competition, false advertising, trademark infringement and related claims under federal law and Tennessee law...Our expected result of the lawsuit, at worst, in our opinion, is that ZGEN may be enjoined from communicating comparative safety information about RECOTHROM and THROMBIN-JMI, but we believe messaging around coagulopathies is sufficient to differentiate RECOTHROM without a direct comparative message."

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