) to buy from hold.
Analyst Jason Kantor says results from a second Phase III trial for Entereg showed a statistically significant difference. Entereg is a compound developed for the treatment for postoperative ileus, a delayed recovery of bowel function following surgery. The study corroborated positive efficacy and safety results that were seen in the first Phase III trial.
Importantly, the second study showed a dose response curve that was't observed in the first trial, demonstrating a one-day benefit of Entereg. Adolor thinks the one-day benefit will shorten the time to recovery of a patient's gastrointestinal functions, and shorten the time of a hospital stay, should help drive market adoption. The new $22 target is based on shares trading at 31 times his new $1.60 2009 earnings per share estimate, discounted at 22.5%.
Adolor says it believes the results are strong enough to enable it to apply for marketing approval with U.S. regulators in the first half of 2004.
The company is developing a partnership with GlaxoSmithKline.