Allos Therapeutics Evenly Poised - Analyst Blog
August 15 2011 - 4:33AM
Zacks
We are maintaining our Neutral recommendation on Allos
Therapeutics Inc. (ALTH) with a target price of $1.85.
Allos, founded in 1992 and headquartered in Westminster,
Colorado, is a biopharmaceutical company focused on the development
and commercialization of small molecule drugs for the treatment of
cancer. The company, formerly known as HemoTech Sciences, Inc.,
changed its name to Allos Therapeutics, Inc. in October 1994.
In August 2011, Allos reported profit in the second quarter of
2011, driven by higher sales of Folotyn. We believe that the
earnings report is a non-event and investor focus will be on Allos'
impending merger with AMAG Pharmaceuticals (AMAG).
The deal is expected to close by year-end.
The merger will bring together Allos and AMAG's sole marketed
products, Folotyn and Feraheme, respectively. The deal will
strengthen the balance sheet of the merged entity, thus enabling it
to expand the product portfolio beyond Feraheme and Folotyn.
The merger will result in significant cost savings apart from
benefiting Allos shareholders who will receive 0.128 shares of AMAG
per share of Allos on closure of the deal. Following the deal, AMAG
shareholders will own approximately 61% of the combined company
while Allos shareholders will own the balance. However, we prefer
to remain cautious until the completion of the deal. If the merger
fails to materialize, the stock price at Allos will be severely
impacted. In that scenario, Allos will revert to the status of a
one-drug company without the advantage of a decent pipeline.
We see limited upside potential for the stock prior to the
completion of the merger and retain our Neutral stance on the
stock.
ALLOS THERAPEUT (ALTH): Free Stock Analysis Report
AMAG PHARMA INC (AMAG): Free Stock Analysis Report
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