Ocular Focus Reveals Strong Upside by Lon Juricic (09-JUN-04)
ISTA Pharmaceuticals (NASDAQ: ISTA )
Rating: BUY (below $15 per share)
Current Price: $12.93
Price Target: $20
About The Company:
ISTA Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on the development and commercialization of unique and uniquely improved ophthalmic products. ISTA’s products seek to address serious diseases and conditions of the eye such as vitreous hemorrhage, diabetic retinopathy, hyphema, glaucoma, ocular pain and inflammation. Building on this pipeline, ISTA’s goal is to continue its growth as a specialty pharmaceutical company by acquiring complementary products, either already marketed or in late-stage development.
Recent News:
June 7 - Ventiv Health, Inc. (Nasdaq: VTIV) announced that it will provide a national sales force for ISTA Pharmaceuticals, Inc. (Nasdaq: ISTA) to promote ISTA’s newly approved glaucoma product, Istalol(TM). The Food and Drug Administration approved Istalol(TM), a beta-blocking agent for the treatment of glaucoma, in June 2004.
June 7 - ISTA Pharmaceuticals, Inc. (Nasdaq: ISTA) today announced that it will present at the Pacific Growth Equities Life Sciences Conference at 10:30 a.m. PDT (1:30 p.m. EDT) on Wednesday, June 9, 2004 at The Mark Hopkins Inter-Continental Hotel in San Francisco, Calif. June 7 - ISTA Pharmaceuticals, Inc. (Nasdaq: ISTA) announced that the U.S. Food & Drug Administration (``FDA``) has approved the New Drug Application (``NDA``) for ISTALOL(TM), a once- a-day liquid formulation of timolol, for the treatment of glaucoma.
Analysis:
ISTA currently has four product candidates each of which are in the various stages of development. Because Vitrase has been studied for multiple potential indications, the ISTA pipeline actually targets a total of six potential indications.
On June 7th, ISTA announced FDA approval of Istalol for glaucoma, which is the company`s second FDA approval; the company announced FDA approval for Vitrase as a spreading agent in May. ITSA is expected to launch Istalol within the next few months and said, based on NDC Health data, it estimates that the U.S. pharmaceutical market for the treatment of glaucoma exceeds $1.1 billion per year, and that the U.S. ophthalmic beta-blocker market exceeds $170 million per year, with over 4.4 million prescriptions written annually.
While the company has been on a role so far this year, the Xibrom NDA submitted by the company in May for the treatment of ocular inflammation following cataract surgery could act as a catalyst for the stock. The company said in contrast to current competitors’ products in the non- steroidal anti-inflammatory category, which are commonly administered four times per day, Xibrom’s twice-daily dosing and a favorable side effect profile provide significant advantages. Based on FDA acceptance of the filing, a second quarter 2005 approval of Xibrom can be expected. Many suggest Xibrom is the company’s strongest opportunity, but has been overshadowed by the recent FDA approvals and upcoming product launches. Other drivers for ISTA include a supplemental NDA (sNDA) for a 150-unit vial of Vitrase in Q3 2004.
ISTA is relatively under-followed on Wall Street, with just 4 analysts covering the stock, and no top-tier brokerages. The firms and ratings: Thomas Weisel has an ``Outperform`` rating on the stock and a $19 target, RBC Capital has an ``Outperform`` rating on the stock and a $18 target, Jefferies has a ``Hold`` rating and $12 target, and Roth Capital has a ``Neutral`` rating and $12 price target. Because of the company`s successful navigation of the FDA system, its undiscovered status, and the numerous positive catalysts, we believe ISTA represents a major opportunity for risk adverse biotech investors. We are initiating coverage on the stock with a ``Buy`` rating and $20 12-month price target.
This article highlights the commentary of Lon Juricic for the Zacks.com audience. Lon Juricic provides insightful analysis, market commentary, and favorite recommendations on a timely basis in "Biotech Insider" newsletter. Try it free for 30 days and see if you can improve your investment performance. Learn more about "Biotech Insider" and 30-Day Free Trial. And get immediate access to current issues and special reports. Click here now.
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