Stock Alert for Achillion Pharmaceuticals Inc. ($ACHN)
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    Stock Alert for Achillion Pharmaceuticals Inc. (ACHN)

    Achillion Pharmaceuticals Inc. (ACHN) is a biopharmaceutical company focused on the discovery, development and commercialization of innovative treatments for infectious diseases. Within the anti-infective market, it is currently concentrating on the development of antivirals for the treatment of chronic hepatitis C and the development of antibacterials for the treatment of resistant bacterial infections. As of December 31, 2009, ACHN focused on developing three Hepatitis C virus (HCV) drug candidates: ACH-1625, a protease inhibitor for the treatment of chronic hepatitis C, currently being tested in an on-going phase IIa clinical trial; ACH-2684, a pangenotypic protease inhibitor, for which it has completed preclinical testing; and ACH-2928, an NS5A inhibitor, for which it has completed preclinical testing. It has also developed ACH-1095, a NS4A antagonist for the treatment of chronic hepatitis C, to which Gilead Sciences Inc. retains certain future development rights.  In addition, ACHN has established a pipeline of certain other product candidates, for which it is seeking additional collaborative partners. These product candidates include ACH-702 for the treatment of serious bacterial infections and elvucitabine for the treatment of human immunodeficiency virus (HIV) infection.

    Share Statistics (22-June-11) FY 

    2009

    FY 

    2010

    %  

    Chg

    Q1 

    2010

    Q1 

    2011

    %  

    Chg

    Symbol ACHN Revenue, $Mn -0.29 2.44 941.4% 0.07 0.07 0.0%
    Current price $7.26 Gross marg. 100.0% 100.0% 0.0% 100.0% 100.0% 0.0%
    52wk Range: $2.00-$7.65 Oper. margin -1038.5% -15616.9%
    Avg Vol (3m): 956,823 Net margin 8941.4% -1044.3% -111.7% -8057.1% -14471.4% 79.6%
    Market Cap. 424.07M
    Shares Outstanding 58.41M EPS, $ -0.97 -0.57 -41.2% -0.16 -0.17 6.3%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of ACHN spiked almost 21% in yesterday’s trading after the biopharmaceutical company announced the pricing of the public offering of its common stock.  The New Haven, Connecticut-based company said it plans to sell 9.6 million shares at $5.90 a share, down from the previous session’s closing price of $6.01. It said the underwriters would have a 30-day option to buy another 1.4 million shares to cover any over allotments.

    The Company expects to raise net proceeds of $52.9 million, which it said will be used to fund clinical testing and drug development.

    Subject to customary closing conditions, the transaction is expected to close on June 27. BofA Merrill Lynch and Leerink Swann LLC are acting as joint book-running managers for the offering.

    ACHN earlier on Monday said it would sell 9 million shares, which should net the company around $52.1 million.

    Also yesterday, the Company announced that it has initiated patient dosing in segment 2 of its Phase II clinical trial of ACH-1625 for the treatment of hepatitis C virus (HCV) for genotype 1 treatment naïve HCV-infected patients. ACH-1625, discovered and advanced by ACH, is a potent small molecule inhibitor of HCV protease, an enzyme necessary for viral replication.

    The Company said the trial will take place in the United States and Europe and is designed to enroll approximately 60 HCV-infected patients. The 12-week complete early virologic response trial results are anticipated to be announced in the fourth quarter of 2011.

    Elizabeth A. Olek D.O., vice president and chief medical officer of ACHN, commented in the release: “Initiating the second segment of this Phase II clinical trial allows us to build upon the robust RVR results we observed with ACH-1625, and to further augment the safety and efficacy database by taking the opportunity to study multiple doses of ACH-1625.  We expect that the results will provide important insight to benchmark the activity of our once-daily protease inhibitor and we look forward to reporting cEVR results by the end of this year.”

    ACHN gained $1.25 to close Wednesday’s trading at $7.26 per share. More than 7 million shares have traded hands during the session, versus the 10-day average volume of 746.89K.  The stock has been moving within a range of $2 – $7.65 over the past 52-weeks. The stock is currently trading above its 50-day moving average of $6.08 and above its 200-day moving average $5.43. Market capitalization currently stands at 424.07 million and it has 58.41 million outstanding shares.

    Visit ACHN at www.achillion.com

    Financial Summary

    For the first quarter of 2011, the Company reported a net loss of $10.1 million, or $(0.17) per share, compared with a net loss of $5.6 million, or $(0.16) per share for the first quarter of 2010.

    Revenue for the three months ended March 31, 2011, was $65,000, compared with revenue of $74,000 for the three months ended March 31, 2010. Revenue in both periods consisted primarily of reimbursed costs under the Company’s collaboration with Gilead Sciences Inc.

    Research and development expenses were $8.0 million in the first quarter of 2011, compared with $4.0 million for the same period of 2010. Research and development expenses were primarily related to costs incurred from the ongoing phase II clinical trial with ACH-1625 and preparations to advance the Company’s two additional HCV compounds, ACH-2684 and ACH-2928, into clinical trials during the first half of 2011. As the Company continues to advance its three HCV compounds in the clinic, it expects that research and development expenses will remain consistent with first-quarter levels during the remaining quarters of 2011.

    For the three months ended March 31, 2010, general and administrative expenses totaled $2.2 million, increased slightly from $1.7 million for the same period in 2010.

    As of March 31, 2011, cash, cash equivalents and marketable securities totaled $46.4 million.

    Financial Strength (22-June-2011) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 1.84 2.08 0.71
    Current Ratio (MRQ) 7.75 2.35 2.62 1.03
    LT Debt to Equity (MRQ) 0.00 26.49 23.33 136.63
    Total Debt to Equity (MRQ) 0.00 30.64 29.50 182.41
    Interest Coverage (TTM) -63.37 3.17 1.61 18.12

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among 11 polled investment analysts. Against the Achillion Pharmaceuticals Inc company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 7 2 2 0 0 0
    4 weeks ago 5 2 2 0 0 0
    2 months ago 5 1 2 0 0 0
    3 months ago 6 1 2 0 0 0
    Last year 7 0 2 0 0 0

    The seven analysts offering 12-month price targets for ACHN have a median target of 10.00, with a high estimate of 14.00 and a low estimate of 5.00. The median estimate represents a 66.39% increase from the last price of 6.01.

    Source: markets.ft.com

    Consensus Estimates Analysis

    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Jun-11 8 0.17 0.30 0.05 0.07
    Quarter Ending Sep-11 8 0.31 1.35 0.06 0.07
    Year Ending Dec-11 10 2.20 15.00 0.06 10.41
    Year Ending Dec-12 7 6.89 20.00 0.60 6.29
    EARNINGS (per share)
    Quarter Ending Jun-11 9 -0.17 -0.16 -0.19 -0.20
    Quarter Ending Sep-11 9 -0.18 -0.16 -0.20 -0.21
    Year Ending Dec-11 10 -0.64 -0.22 -0.76 -0.52
    Year Ending Dec-12 9 -0.69 -0.54 -0.94 -0.63

    Technical Analysis

    Source: http://stockcharts.com

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    June22-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    GlaxoSmithKline plc GSK 41.31 105.07B 11.20 10.35 2.34 2.25
    Roche Holding AG RHHBY 41.11 35.00B 11.39 10.05 0.65 0.62
    Anadys Pharmaceuticals Inc. ANDS 1.01 57.71M n/a n/a 20.18 10.04
    Merck & Co. Inc. MRK 35.47 109.48B 9.51 9.21 2.32 2.35
    Human Genome Sciences HGSI 25.09 4.76B n/a n/a 28.50 10.15
    Johnson & Johnson JNJ 66.07 181.11B 13.35 12.49 2.78 2.64
    Abbott Laboratories ABT 52.08 80.95B 11.32 10.52 2.10 2.02
    Biotechnology Median 19.23 n/a 10.27 n/a
    Achillion Pharmaceuticals Inc. ACHN 7.26 424.07M n/a n/a n/a 59.90

    Source: Thomson Financial

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