Savient Pharmaceuticals, Inc. (NASDAQ: SVNT), surged yesterday on analyst comments regarding their promising new treatment for Gout. Savient is a biopharmaceutical company. It engages in the development, manufacture, and marketing of pharmaceutical products that target unmet medical needs.
Savient makes Oxandrin, which treats involuntary weight loss caused by trauma, surgery, or diseases such as HIV. The company reported a 3rd quarter loss due to increased generic competition for the drug. This is just another in a long line of Pharmaceutical companies to lose market share to the generics. Nonetheless, Citi Investment Research analyst Andrew Swanson started coverage of the drug maker with a "Buy/Speculative" rating and $21 price target. Which is 50% higher than yesterday's closing price.
The company's biggest growth prospect is Puricase which treats gout, a painful inflammation of the joints caused by having too much uric acid built up in the blood. Swanson notes that gout is a large and untapped market, as three million patients await their first new therapy in more than 30 years. At $15,000 per year, even making modest market share assumptions, Swanson's peak sales forecast for Puricase is $600 million.
With such a promising drug in the pipeline this looks like an interesting play. Savient's entire market-cap is $767 million, so this could be a huge opportunity for investors. But as the case with all potential blockbuster drug in trial, if the trial fails, look out below! In a note to clients, Swanson estimates the chance of positive data at 80%, but warned that if the trial fails, Savient shares could fall to as little as $3. Yikes.
Clearly this isn't for the faint of heart, but if you can stomach the potential downside, the upside potential will be well worth the risk.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position in any stock mentioned as of 11/29/07.











Reader Comments (Page 1 of 1)
11-29-2007 @ 9:56PM
TX CHL Instructor said...
Gout is easily treated in about 98% of cases by some simple dietary changes and a drug that is nearly as cheap as dirt. My allopurinol prescription costs me $30 a year.
I find it hard to believe that a company can make any significant money off of gout when there is a safe, effective, and cheap treatment already available.
11-30-2007 @ 4:35AM
Larry said...
I have been dealing with gout for years. It is painful and very frustrating as you try to think each day it gets worse that it is going to go away. When I experience the first day , which is a dull pain begining in my right toe , I say to myself , O.K. what did I recently eat , It couldn't be just about everything I eat that causes gout that I like and refuse to stop eating , but it is. I recently lived in FL. and ofcourse the Shrimp is one of my fav's and with a huge abundance of it I ordered it frequently. Now , I must tell you I also had a supply of the only thing that I know of that gets rid of gout within 2-3 hours. Hence ,the rediculous self satisfying urge to eat red meat , scallops and shrimp was O.K. I had two attacks in 6 mos.
On the other hand, in our busy world we live in and forgetting to re-fill my gout scripts , I HAD ONE OF THE WORST attacks in a long time last week. It was ten o'clock and It would not leave me alone , I thought if I got to sleep I would have time to go and get scripts filled. No , I ended up in the emergency room at 11:00 , and thank God the drug store is open 24 hrs. The old 1-2 punch dad kicked in as I walked back into the house.
Stress is also a big factor with gout! I have kept track of the attacks and know how to prevent them. I drink I glass of pure cherry juice every day, this is a proven remedy , I just don't know how much your supposed to drink. No red meat and no seafood with Iodine , shrimp etc. They say all shell fish but I don't know. I still eat shrimp once a month and have no problem.
I would love to buy stock in a new drug for gout as most people would rather take a pill than eat healthy. Taking responsibility is a real problem for most. L.B.
12-02-2007 @ 1:54AM
Orion said...
Allopurinol is not well-tolerated by all gout sufferers and is no use at all in stopping an active attack. It also doesn't remove/shrink gout tophi already formed in the joints. The Phase II trials for Puricase earlier this year seem to mark it as the Holy Grail for gout sufferers. Not only does it reduce uric acid in the bloodstream to almost undetectable levels it dissolves or greatly reduces the tophi which are responsible for recurring attacks and unsightly joint deformations. If the Phase III trial report due out this month is as encouraging as rumor would have it then gout sufferers by the millions will be marching (hobbling?) on Savient's corporate HQ to demand they release it to the public ASAP.
1-22-2008 @ 4:24AM
医药健康搜索 said...
Gout drug market should be useful, a number of pharmaceutical manufacturers relatively good.