Ariad Pharmaceuticals (ARIA) Reports 1Q Financials, Buy Reiterated at Brean Murray Carrett & Co.

Ariad Pharmaceuticals

has reported its 1Q Financials and a buy rating has been reiterated at Brean Murray Carrett & Co. The Cambridge, Massachusetts company reported earnings of $(.21) versus the analyst Ling Wang, CFA and others' consensus of $(.17)due to a higher than expected non-cash charge related to the revaluation of warrant liability, and partially offset by lower-than expected R&D expenses. The management of the biopharmaceutical company announced that they restructured a collaboration agreement with Merck and expect to receive a $50 million upfront payment and $19 million for reimbursement for costs related to ridaforolimus, the cancer fighting drug. The analyst feels that these revised terms are very favorable for the firm and free up resources to pursue other products in the pipeline. As such, the analyst has reiterated her buy rating with a $5.00 price target. The valuation is cited by the analyst as the NPV summation of the current drugs, the technology value and the other products in the pipeline. The risks include clinical risks associated with the various products, commercialization risk, regulatory risk, high stock price volatility and legal risk. ARIA closed at $4.25 on 05/12. The company focuses on the discovery, development, and commercialization of small-molecule drugs for the treatment of cancer in the United States, Europe, and Japan.