Markets & Finance

Merrill Downgrades IDEC to 'Neutral'

Merrill Lynch downgraded IDEC Pharmaceuticals (IDPH) to neutral from buy.

Analyst Eric Ende says the near-term growth potential of the company's cancer drug, Zevalin, is less certain as physician adoption remains slow. Ende attributes the weak growth to logistical issues that is making the drug cumbersome, as well as uncertainty as to which patients would benefit most from the drug and concerns that the use of Zevalin may limit future treatment options.

Ende reduced his $79 million 2003 Zevalin sales target to $59 million and lowered the $140 million 2004 estimate to $104 million. He notes sales of IDEC's Rituxan drug begun to slow after 4.5 years of unusually strong growth. Ende adds that October sales rose a modest 1.1% on a daily basis. He cut the $1.14 2003 earnings per share estimate to $1.07, and cut the $1.47 2004 estimate to $1.35.

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