Investors who stuck with Advanced Life Sciences (ADLS) even after it delayed completion of Phase 3 clinical trials on cethromycin felt rewarded when the Food & Drug Administration granted it "Orphan Drug" designation. Such status is given to drugs that offer potential therapeutic value in treating rare diseases--those affecting fewer than 200,000 Americans--and grants it seven years of market exclusivity once approved. Cethromycin is a treatment for anthrax and "community acquired pneumonia." Some analysts also stayed bullish despite the three-month delay. President John Flavin says the results will now be out in the second quarter. The delay was disappointing because it pushed back the filing for a new drug application, "but it's a prudent approach" to get the best study and results possible, says Angela Larson of Susquehanna Financial Group, who is "positive" on the stock. The trials started in December with 1,000 patients in 16 countries. The U.S. Army Medical Research Institute of Infectious Diseases is collaborating with Advanced Life on cethromycin. Ilya Kravets of Rodman & Renshaw rates the stock, now at 2.40, "outperform," with a 12-month target of 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