From Standard & Poor's Equity ResearchBear Stearns downgraded Tanox (TNOX
) to peer perform, noting that the Food and Drug Administration requested additional study for the company's HIV drug.
Analyst Akhtar Samad says the need for an additional dose-finding trial may delay the start of the company's Phase 3 program from the second half of 2006 into 2007, removing a major near term catalyst. And if Tanox needs multiple Phase 3 studies, delays would be greater. Although the analyst still thinks Xolair provides a floor of $15 to $16 for the stock price; removal of this near term catalyst leads to his belief that the stock will remain flat until an optimal dose is identified and TNX-355's path to the market becomes clear.