First Albany Keeps Buy on OSI Pharmaceuticals

The drugmaker says a Phase III study of cancer drug Tarceva met its target

First Albany keeps the buy rating on OSI Pharmaceuticals (OSIP ).

Analyst David Webber says he's reiterating the buy rating based on a successful Phase III trial of Tarceva for front-line therapy of pancreatic cancer, in which Tarceva raised the overall survival rate in patients by 23.5%. He says the positive outcome is a surprise, as OSI and partner Genentech warned that the study had a high risk of failure.

Webber says, considering the poor prognosis in pancreatic cancer, he expects Tarceva for pancreatic cancer to begin off-label use after it reaches the market, with approval for nonsmall-cell lung cancer expected by February, 2005. He upped the $63 target to $77, based on the new fiscal 2008 (Sept.) earnings per share estimate of $3.66.

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