UPDATE: Bank of America Downgrades Idenix Pharmaceuticals to Underperform on Unfavorable Patent Ruling

In a report published Monday, Bank of America analyst Rachel McMinn downgraded the rating on Idenix Pharmaceuticals

from Neutral to Underperform, and lowered the price target from $7.00 to $3.00. In the report, McMinn noted, “IDIX announced that US patent office determined IDIX to be the ‘junior party' and GILD the ‘senior party' in a patent interference procedure related to GILD's HCV nucleotide inhibitor GS-7977. This decision is a negative surprise for IDIX, as the company previously believed it would be named senior party, meaning it would be well positioned to claim first to invent status on a key GS-7977 patent, and therefore have a royalty claim on future sales. While there may be a future path for IDIX to seek royalties on appeal of this interference decision or prosecution of granted IDIX patents, our confidence is substantially eroded for IDIX winning a future royalty claim and we are no longer comfortable relying on royalties as a source of valuation.” Idenix Pharmaceuticals closed on Friday at $4.02.