(TASE:AGIS) will beat forecasts for the second quarter, predicts Bank Hapoalim analyst Rakefet Levison-Apter, but may see its fortunes fluctuate in the second half of 2002.
She repeated the share's Buy rating and price target of NIS 40, about 21% above its market level.
Agis began to make good on promises when its U.S. subsidiary Clay Park Labs received Food and Drug Administration approval to market two generic drugs mometasone ointment, used to treat dermal inflammations, and ammonium lactate cream, which treats dry skin.
Sales of the original mometasone were about $17 million in 2001, and of ammonium lactate, about $40 million, Levison-Apter says.
Only Clay Park has received the FDA okay to sell the generic versions of the two drugs, she adds. She sees the two contributing $19 million a year to Agis' sales, as long as the Israeli drugmaker remains the only one selling the generic versions.
For this year they will contribute only about $9.5 million, because of the timing of the FDA approvals.
She expects Agis to beat second quarter forecasts, thanks to the boost its subsidiary ChemAgis received from selling raw materials to Teva, which is gearing up to produce Tramadol.
Agis' domestic activity is expected to suffer in the third quarter, on intensifying generic competition for its antibiotic product Ciprogis (the fluoroquinolone antibiotic ciprofloxacin). Sales are already hurting, Levison-Apter says because the health maintenance organizations refuse to buy it now, expecting its price to fall.
The analyst expects Agis' profits to fluctuate in the quarters to come, with most of the company's profits being generated in the first half.
Chemagis is already producing at full capacity, and needs more. Sometimes it makes more sense to buy a plant with overcapacity, as Teva does, rather than build a production line, Levison-Apter points out. In this context, Agis is holding talks to buy plants in Germany and India, with each costing about $15 million.
She predicts that Agis will report 14% sales growth in the second quarter to NIS 345 million, and that its profits will spring up 73% from the parallel quarter to NIS 12 million.