CE Unterberg Ups Noven Pharmaceuticals Outlook

The drug maker licensed methypatch to Shire Pharmaceuticals, which should improve its commercial prospects

CE Unterberg raised its estimates on Noven Pharmaceuticals (NOVN ).

Analyst Kenneth Trbovich says the stock's rise is solely on the back of a licensing agreement with Shire Pharma, not on fourth quarter results. He notes as a result of the Shire deal, the company eliminated the launch and sales costs for methylphenidate transdermal system, resulting in a big earnings boost. He adds that the deal will provide improved commercial prospects, an a $150 million contribution up front. Trbovich is raising his 30 cents 2003 earnings per share estimate, and review his model and short-term avoid rating after a Thursday conference call. He notes fourth quarter performance is slightly above expectations, but the company guided to slower first quarter growth.

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