CS First Boston Lowers Andrx to 'Underperform'

Analyst David Maris cites a patent infringment ruling against the drug maker for its generic Prilosec

Credit Suisse First Boston cut Andrx (ADRX ) to underperform from neutral.

Analyst David Maris says he is removing Prilosec from Andrx's model. A judge ruled that the drugmaker infringed on two patents held by AstraZeneca for its Prilosec, and said the two patents are valid until 2007.

Maris feels the decision is definitive on several counts, and says the potential launch of an over-the-counter version early next year removes the upside to an even late launch from Andrx. The question now, he says, is how to deal with Andrx, now that it has lost the trial after having built up so much of its business around the Prilosec opportunity.

He slashed the $0.57 2002 earnings per share estimate to $0.02, and reduced his $2.80 2003 earnings per share estimate to $1.50. He says he would not be surprised to see generic companies come under pressure in the near-term following this decision. He cut the $30 target to $11-$14.

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