Brean Murray Raises Inhibitex PT to $19 From $12

In a note out today, Brean Murray raised its price target on Inhibitex INHX, the biotech firm that is working on a hepatitis C treatment, to $19 from $12 and reiterated a buy rating on the shares. Shares of Inhibitex are up more than 19% after the company released a positive update on INX-189, its hepatitis C treatment. “Inhibitex's additional Phase 1 data confirming INX-189 synergy with ribavirin has set the company up for a much more meaningful data set in 1Q12 when they explore several additional doses that may position them with the most potent nucleotide in development,” Brean Murray said in a note. Inhibitex has been mentioned as a possible takeover target following the $11 billion offer for Pharmasset VRUS by Gilead Sciences GILD last week. “Our target price of $19 is derived from a combination of a sum-of-the-parts valuation model and a comparable company valuation methodology. Our SOP model is based on peak year sales of $1,500 million for INX-189 and peak year seals of $150 million for FV-100, probability weighted for a 40% and 20% chance of success, respectively. Risks to the achievement of our target price include: (1) disappointing clinical data from Inhibitex's drug candidates; (2) failure to successfully commercialize Inhibitex's drug candidates; (3) disappointing sales; and (4) a more competitive environment,” Brean Murray said in the note.