Deutsche Bank Has Buy On XenoPort (XNPT)

Deutsche Bank has a Buy rating and a $13 price target on shares of XenoPort XNPT following earnings. In a note to investors, Deutsche Bank writes, "In conjunction with the Q1 results, XNPT disclosed a new preclinical compound (XP23829) - an oral prodrug of methyl hydrogenfumarate (MHF) that appears to have anti-inflammatory properties. This new agent is similar to DMF (dimethylfumarate), which is approved in Germany and widely used for treating psoriasis. Of note, DMF is the active ingredient in Biogen's oral MS compound BG-12 (a prodrug of MHF with a different chemical structure) - which recently reported positive, Ph 3 efficacy data. Given BG-12's strong results coupled with '829's initial animal data, which indicates less gastric irritation than MHF (potentially improved tolerability), mgt has decided to accelerate the development of this program and hopes to initiate Ph 1 testing in 2012. While extremely early, '829 could potentially emerge as a significant opportunity, particularly if XNPT is able to confirm reduced GI side effects and develop a once-daily formulation." Shares of XNPT closed at $7.68 yesterday.