Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Non-interferon-based hepatitis-C drug hopefuls Achillion Pharmaceuticals
So what: Achillion rocketed higher from the onset of trading because of Bank of America Merrill Lynch raising its rating on Achillion to "buy" from "underperform," and boosting its price target to $13 from $7. Deutsche Bank also initiated Achillion with a "buy" rating and a $12 price target. Bank of America cited enthusiasm over Achillion's hepatitis-C pipeline as the reason behind the upgrade. Conversely, Bank of America Merrill Lynch lowered its rating on Idenix to "neutral" from "buy," as well as reducing its price target to $6 from $8, because of recent concerns over its lead drug candidate, IDX-184.
Now what: As usual, no matter how much we agree or disagree with analyst ratings, we can't allow them to sway our investment thesis as they have only a very short-term effect on a stocks' share price.
What's really going on here is that Achillion has had very few setbacks as compared to the nucleotide-based hepatitis-C drug hopefuls that have struggled with safety concerns since Bristol-Myers Squibb
In my recent "CAPScall of the Week," I forecasted that Achillion would underperform the market. While I'm down on that call right now, I don't see a large enough piece of pie being left over for the company given that Vertex Pharmaceuticals'
Fool contributor Sean Williams owns shares of Bank of America, but has no material interest in any other companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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