Markets & Finance

Lehman Downgrades CancerVax to Neutral

Lehman Brothers downgraded CancerVax (CNVX) to neutral from positive.

Analyst Craig Parker thinks current valuations have discounted the positive attributes of the biotechnology sector. As a result, he downgraded the sector. He notes the sector has achieved a level of financial maturity reflected in product sales of $30 billion-plus, an average operating margin for profitable companies of 34%, and sales growth of 20%-plus.

However, Parker believes with increased reimbursement pressures, intensfied competition in most categories, and anticipated deceleration in sales growth in 2005, the sector could trade at a discount to historic levels for the next 12 months.

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