Morgan Stanley upgraded Protein Design (PDLI ) to overweight from underweight.
The biotech company doesn't plan additonal development of Zenapax as a therapy for psoriasis, as the as drug did not meet its primary endpoint. Analyst Ian Somaiya says the primary endpoint was the prolongation of time to the recurrence of psoriasis. He says the news confirms his concerns highlighted in his initiation on Mar. 11.
He believes the confirmation of the trial's failure removes a dark cloud which has lingered over the stock for the past month, creating an attractive entry point into Protein Design. With the bad news behind the company, Somaiya expects a strong calendar of news flow to support share price appreciation. He has a $25 target.