CollaGenex Pharmaceuticals “buy,” target price raised

02/25/04 - Roth Capital

NEW YORK, February 25 (New Ratings) – Analysts at Roth Capital reiterate their “buy” rating on CollaGenex Pharmaceuticals (CGPI). The 12-month target price has been raised to $14.

Shares of CollaGenex Pharmaceuticals, a specialty pharmaceutical company, are currently trading at $11.00.

According to Roth Capital's research note published this morning, CollaGenex Pharmaceuticals' Q4:03 EPS was marginally ahead of the estimates. The company posted gross margins growth during in quarter due to its revamped product mix, the analysts say. However, the company's SG&A expenditures increased in Q4:03, the analysts add.

The analysts mention that CollaGenex Pharmaceuticals likely to acquire a dermatology-based company in the future. The analysts believe that the company is likely to report strong earnings growth in the forthcoming quarter, given the lean cost structure and high margins nature of the operations, the analysts say. According to Roth Capital, the company's Periostat product would drive revenues in 2005.

The EPS estimates for 2004 and 2005 are $0.42 and $0.95, respectively. The P/E estimates for 2004 and 2005 are 26.0x and 12.0x, respectively.

Roth Capital reiterates its “buy” rating on CollaGenex Pharmaceuticals.