) is a "pure play on dermatology," and 2005 should be a stellar year for the company, says Marc Goodman of Morgan Stanley (MWD
), which took Barrier public in 2004 at 15. Three of its anti-fungal products -- Zimycan, Sebazole, and Hyphanox -- are nearing Food & Drug Administration approval. They're reformulations of O.K.'d products, so the rejection risk is small, says Goodman. He sees the FDA approving Zimycan this quarter, and a launch later in 2005. He also expects Barrier to file for Sebazole's approval in the third quarter.
And data about Hyphanox' effect on vaginal yeast infections, to be released this quarter, should be favorable. The antifungal products will generate $200 million in sales by 2009, figures Goodman. The stock hit 22 in February, fell to 14 in March when rival Eon Labs (ELAB
) launched a generic Hyphanox, and is now 15. Goodman says the flap was exaggerated: He believes once-a-day Hyphanox has an edge over a twice-a-day generic.His price target is 21, or 25 times his $1.29 earnings estimate for 2008, when he expects the first full year of profits. Another Barrier fan: George Soros, whose funds own 11.5%.Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them. By Gene G. Marcial