Collins Stewart has updated its coverage of biotechnology company Rosetta Genomics Ltd. (Nasdaq:ROSG), following the company's analyst day last Friday.
Rating the company "Buy" with a target price of $10, Collins Stewart notes, " The CUP assay, now in its final stages of development, and other diagnostic assays continue to play an integral part of Rosetta’s development program. We continue to believe investors should view the CUP as a potential funding stream for its R&D pipeline. Once launched, potentially as soon as mid-2008, we believe the assays will bring in a steady flow of cash which can be shunted to offset the costs of an expensive pipeline."
"Rosetta continues to plan to launch two additional diagnostic products in 2008, one for identifying lung adenocarcinoma cancer from mesothelioma and one to differentiate adenocarcinoma from squamous carcinoma in the lungs. We believe these two assays in addition to the CUP assay will create a trifecta of products which will serve as the platform of their portfolio," Collins Stewart adds.
As for potential products and revenue Collins Stewart points out that, "Rosetta continues to develop the four potential microRNA targets have been identified which may turn into potential therapeutic candidates for liver cancer with its partner Isis Pharmaceuticals. Should a product candidate emerge from the collaboration, Rosetta could be entitled to up to $27 million in milestone payments and royalties on sales. The company anticipates it may file an Investigational New Drug application on a lead candidate in 2009."
Collins Stewart believes that for investors Rosetta represents next generation science at a relatively low valuation. "What Rosetta presents investors with, we believe, is a chance to participate in the next generation of RNAi therapeutics, at a floor valuation, at which little if any future success is implied. Today’s investment in Rosetta should be hinged on faith in the company’s longer term ability to find in-licensors of its proprietary IP related to microRNA," it concludes.
Rosetta Genomics' share closed at $6.50 on Nasdaq yesterday, giving the company a market cap of $77.07 million
Published by Globes [online], Israel business news - www.globes.co.il - on October 30, 2007
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