Healthcare Sector Review: GTx Jumps, FDA-Approved Cellulite Solution

GTx, Inc. (NASDAQ:GTXI) is surging, after Citigroup predicted that the company is highly likely to report positive Phase III results for its Ostarine drug in about a year. A drug that is supposed to prevent and treat cancer-related muscle wasting, Ostarine is worth at least $11 per share should the trials be positive, according to Citigroup. After adding Ostarine to its valuation model for GTx, Citigroup hiked its target on the stock to $19 from $8. Noting that Ostarine has consistently improved cancer-related lean body mass and physical function in eight prior trials, Citigroup thinks the drug could attract interest from biopharma companies with oncology products. In mid-afternoon trading, GTx jumped $2.06, or 52.28%, to $6.00.

The shares closed at $5.88, up $1.94, or 49.24%, on the day. Its market capitalization is $369.21 million.

Cynosure, Inc. (NASDAQ:CYNO) announced that the U.S. FDA has cleared the company’s Cellulaze Workstation for commercial distribution, giving millions of American women the first minimally invasive solution in their battle against cellulite.

The shares closed at $14.02, up $0.9, or 6.86%, on the day. Its market capitalization is $176.16 million.

Curis, Inc. (NASDAQ:CRIS): Genentech, a member of the Roche Group (RHHBY), announced that Erivedge capsule was approved by the U.S. Food and Drug Administration for the treatment of adults with a type of skin cancer, called basal cell carcinoma, that has spread to other parts of the body or that has come back after surgery or that their healthcare provider decides cannot be treated with surgery or radiation. Erivedge is the first FDA-approved medicine for people with advanced forms of the most common skin cancer. Roche and Genentech are also evaluating Erivedge in a Phase II trial in people with operable forms of BCC. Roche is developing Erivedge under a collaboration agreement with Curis, Inc. (NASDAQ:CRIS) Curis is eligible to receive cash payments upon the successful achievement of specified clinical development and regulatory approval milestones, as well as royalties upon commercialization of Erivedge.

The shares closed at $4.75, down $0.43, or 8.3%, on the day. Its market capitalization is $363.76 million.

Pfizer Inc. (NYSE:PFE) is expected to report Q4 earnings before the market open on Tuesday, January 31 with a conference call scheduled for 10:00 am ET. Analysts are looking for EPS of 47c on revenue of $16.61B. The consensus range is 43c-50c for EPS, and $15.9B-$17.18B for revenue, according to First Call. After reporting better-than-expected EPS and revenue in Q3, the company issued guidance for FY11 EPS of $2.24-$2.29 vs. consensus $2.28 and FY11 revenue $66.2B-$67.2B vs. consensus $67.24B. Looking forward, the company said there exists uncertainty around macroeconomic issues, including pricing pressures in Europe and volatility in emerging markets. At the JP Morgan Global Healthcare Conference, Pfizer said it’s on track to announce a decision for its Animal Health unit. It will also make dividends, share repuchases and “bolt-on” acquisitions its priorities in FY12. In fact, it already raised the quarterly dividend to 22c per share, and targets a dividend buyout ratio of approximately 40% by the end of 2013. In the upcoming conference call, the company is expected to provide details on Lipitor sales numbers after losing exclusivity in late November. The company had said it still plans to market Lipitor, but will focus on remaking itself into a developer of biologic drugs and specialty medicines. Barron’s said this transition into a leaner company is a great buying opportunity as Pfizer expands its sales into emerging markets. In the past quarter, the company announced positive results for Toviaz, Lyrica and Embeda, but disappointing results for its Apixaban trial. In recommendations, Pfizer was downgraded to Hold at Standpoint Research and Market Perform at Leerink, citing valuation and limited pipeline catalysts. Nonetheless, Credit Suisse said the company still has a strong profile particular with the commercial prospects for its Tofacitnib drug.

The shares closed at $21.58, up $0.1, or 0.47%, on the day. Its market capitalization is $165.88 billion.

Abbott Laboratories (NYSE:ABT): The Drugs for Neglected Diseases initiative, or DNDi, and Abbott have signed a four-year joint research and non-exclusive licensing agreement to undertake research on new treatments for several of the world’s most neglected tropical diseases, including Chagas disease, helminth infections, leishmaniasis and sleeping sickness. Through this collaboration, DNDi and Abbott scientists will focus initial efforts on discovering and advancing novel antimicrobial agents with activity against these neglected diseases.

The shares closed at $54.47, down $0.55, or 1%, on the day. Its market capitalization is $84.85 billion.

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To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com