Markets & Finance

Prudential Upgrades CuraGen Rating to Buy

CuraGen Corp. (CRGN) shares were sharply higher after the genomics research firm announced that it had entered into two alliances with pharmaceuticals giant Bayer. Prudential Securities upgraded its investment recommendation on the shares to strong buy from accumulate.

Analyst Charles Duncan says the company announced two "paradigm-shifting" collaborations with Bayer for use of its pharmacogenomics platform. Duncan notes that the second deal is possibly the largest in biotech in terms of deal value and represents a major commitment by Bayer, bringing up to $1.3B to support small molecule drug development against CRGN-generated obesity and diabetes targets. Given the company's strong cash position, and its committed product development funding, Duncan believes it is successfully transitioning to drug development. He has a $60 12-month price target.

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