Yesterday, biopharmaceutical firm QLT
When I last wrote about QLT two months ago, I said "There is some value in shares of QLT" and that "really patient investors might get an opportunity to catch some shares of cash-rich QLT on the cheap sometime this year." Since then, shares have fallen nearly 20% and QLT is trading at an enterprise value of roughly $500 million. This may seem cheap considering that its other marketed drug, the hormone therapy drug Eligard, is expected to grow sales at least 16% in 2007, and that QLT had $0.37 a share in non-GAAP earnings last year.
In the sales numbers press release, QLT's management stated that U.S. sales of Visudyne have finally stabilized. Even though sales of the drug may have finally stabilized domestically at $8 million this quarter, the $53 million worth of international sales of Visudyne have yet to feel the deleterious effects of oncoming major competition from the likes of Genentech's Lucentis. Even worse, QLT's Visudyne European Union marketing partner, Novartis
With Visudyne probably contributing very little to its bottom line in the future, any investment in shares of QLT today is mostly a bet on the success of Eligard. Shares are cheaper today, and as I've said before, there is some value with the company -- it's just not at a $500 million enterprise value. Value investors may get shares on an even bigger sale later in the year or in 2008 once the shoe drops on Visudyne's European sales.
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