Keep Your Eye On COR Therapeutics
Well, we finally stood our ground and attacked Afghanistan. No one knows how long the military campaign will last or what the outcome will be, but we must stand together and remain strong.
As the U.S. took military action, the markets fell, but history has shown the markets will recover after times of crisis. So if you are willing to do some bottom-fishing, one company that looks especially attractive is COR Therapeutics (CORR).
Just before the market closed last Wednesday, COR warned that its third-quarter profit would fall short of expectations due to weak September sales of its anticlotting drug Integrilin, lower interest income and a possible delay in a milestone payment.
Integrilin, COR's lead product, is marketed with partner Schering-Plough (SCH) in the U.S. for the treatment of acute coronary syndromes, and is used to prevent blood clots during angioplasty, a procedure that is used to clear clogged arteries.In its warning, the company said that third-quarter sales of Integrilin to wholesalers in the U.S. would be approximately $53 million, while worldwide sales would be approximately $59 million for the third quarter of 2001, primarily due to lower-than-expected demand in September. The company had originally anticipated worldwide sales of Integrilin for the quarter to be $67 million. While analysts had been looking for a profit of 8 cents per share in the quarter, the company now says it expects to earn just a penny per share. On COR's conference call, management reaffirmed that it is on course to meet fourth-quarter revenue expectations, but the call left me wondering why there wouldn't be an upside to fourth-quarter numbers. If the Sept. 11 attack in New York City caused a postponement in people getting surgery, I would think those same patients would still need to reschedule their angioplasty procedures, allowing COR to regain lost sales. One possibility is that sales were lost because competition may be tougher than anticipated, although the company had said sales were robust up until the week before the tragedy. So the next question that looms in my mind is, can Integrilin continue to capture market share from Johnson & Johnson's (JNJ) ReoPro and Merck's (MRK) Aggrastat, its primary competitors? There are a couple of factors to consider. First, COR has a marketing deal with Genentech (DNA) that should accelerate growth through the end of the year. Second, COR plans to present additional data from the Phase IIb Integrilin trial at the American Heart Association meeting in November. Finally, and perhaps most important, COR and Schering-Plough plan to present preliminary data from their 60,000-patient study to assess and promote implementation of guidelines from the AHA and the American College of Cardiology for early use of IIb/IIIa antagonists, of which Integrilin is one. COR hopes this information will help boost sales and reinforce the credibility of Integrilin as a good drug. While I'm disappointed with the pending formal announcement of the third-quarter results, I'm not discouraged by Integrilin's sales growth. It's a viable drug that has the potential to penetrate the market, but probably not at the rate previously anticipated by Wall Street or COR. COR's management remains confident that the sales trend for Integrilin will continue to grow, despite the slowdown in demand after Sept. 11. However, the latest warning has dampened the momentum of COR's share price, sending it down close to its 52-week low of $17.50. This may be a good time for investors to consider adding COR to their portfolios, as Integrilin's sales will continue to grow. I'd also like to see management's plans for the cash the company has accumulated, having hinted in the past about possible acquisitions or licensing agreements that would help enhance the company's drug pipeline. I advise investors to keep a close eye on Integrilin's sales trend going forward, which can act as a catalyst for COR's share price in the next 12 months. I look for a 12-month target price of $40.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV