Source: Associated Press
December 27, 2005

NEW YORK (AP) - Shares of Aspreva Pharmaceuticals Corp., which develops drug testing trials, jumped nearly 5 percent as Bank of America upped its investment rating on the stock after Aspreva boosted its fiscal 2005 revenue forecast.

The stock added 65 cents, or 4.4 percent, to $15.30 on the Nasdaq where it has traded in a range of $11.18 to $17.25 since its initial public offering in March.

On Friday, Aspreva raised its sales outlook for the year to between $65 million and $70 million from $55 million to $60 million saying it underestimated royalty payments from Swiss drug maker Roche Holding Inc. for CellCept, an immune system-suppressing drug for non-transplant uses.

Analysts, as surveyed by Thomson Financial, anticipate full-year revenue of $56.1 million.

Bank of America lifted its rating on the stock to "Buy" from "Neutral" citing Aspreva's higher sales guidance for CellCept as evidence of an underappreciated market for the drug. The brokerage also raised the target price to $19 from $15.

Analyst David W. Maris wrote that one of his previous key risk factors for the company was an unclear growth trajectory for CellCept in autoimmune uses. He was "quite encouraged" by the expected sales upside and that the trend indicates "significantly more" penetration in that market than previously believed.

Maris raised his full-year earnings estimate to 38 cents per share from 15 cents per share, increased his fiscal 2006 outlook to $1.26 per share from 78 cents per share, and hiked his fiscal 2007 projection by 51 cents to $2.03 per share.

The analyst also lifted his 2006 sales guidance to $132 million from $112 million and boosted his 2007 estimate to $163 million from $140 million.

The analyst expects consensus sales and earnings guidance for fiscal 2006 to be revised upward as well.