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July 6, 1999 Connetics Corporation (NASDAQ: CNCT) Reduced-Risk, Pure Play in Dermatology & Rheumatology; Profitability on the Near-Term Horizon; Well-Financed; Initiating Coverage with BUY Recommendation
Summary Investment Considerations Connetics Corporation ("CNCT") is an emerging pharmaceutical company focused on the development and commercialization of products in niche dermatology and rheumatology markets. CNCTs is executing a reduced-risk, three-part strategy: (1) to in-license and acquire FDA-approved products, or late-stage products in development, (2) to develop and market these novel products through its targeted sales force, focused on the dermatology and rheumatology markets, and (3) to engage in corporate partnerships to market products outside the U.S. that should generate royalty streams to CNCT. CNCT currently markets three products (Luxiq(TM) Ridaura® and ACTIMMUNE®) through a specialized sales force that calls on high-prescribing dermatologists and rheumatologists in the U.S. CNCT also has two promising products (OLUXÔ and ConXnÔ ) in late-stage clinical development. We believe CNCT represents a compelling investment opportunity at this time. With Luxiq (launched 2Q99) anticipated to show strong revenue growth this year, profitability expected in the near-term, and multiple milestones, news events and potential new partnerships and/or acquisitions over the next 6 to 12 months, we believe the stock to be undervalued at current levels. We are initiating coverage with a BUY rating and recommend purchase of CNCT stock for those investors tolerant of the risks associated with small-cap stocks. I. Lower-Risk Strategy of Acquisition & Partnering - Steady Flow of News Events Expected
We are initiating coverage of CNCT with a BUY recommendation with this abbreviated research report. We plan to publish a full-length report, with a detailed analysis of CNCT, its products and the competitive environment (including a detailed financial model), in the near future.
Risk Considerations This section of the document is provided to remind potential investors to undertake a prudent level of due diligence prior to making an investment in the securities of Connetics Corporation. For a complete description of risks and uncertainties to CNCTs business, see the "Risk Factors" section in CNCTs SEC filings, which can be accessed directly from the SEC Edgar filings at www.SEC.gov on the Internet. Other potential risks include:
Sources for Additional Information The following are website addresses offering related information, and links to other sources of information. www.connetics.com Connetics corporate website www.medeva.com Medeva plc corporate website www.suntory.com Suntory Pharmaceuticals corporate website www.SmallCapsOnline.com SmallCaps Onlines site for company information and research www.FDA.gov US Food and Drug Administration homepage www.sec.gov US Securities and Exchange Commission, with links to EDGAR filings www.scleroderma.org The Scleroderma Foundations homepage www.aad.org American Academy of Dermatology homepage www.psoriasis.org National Psoriasis Foundation homepage www.arthritis.org Arthritis Foundation homepage www.rheumatology.org American College of Rheumatology homepage
The information in this report has been obtained from sources that we believe to be reliable, but we do not guarantee its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation by SmallCapsOnline LLC for the purchase or sale of any securities. SmallCapsOnline LLC and/or its affiliates have performed investment banking, consulting or other services for CNCT and may solicit investment banking, consulting or other business from any company mentioned in this report. SmallCapsOnline LLC or its affiliates or persons associated with SmallCapsOnline LLC or its affiliates may at anytime be long or short any of the securities referred to herein and may make purchases or sales thereof while this report is in circulation or posted on the SmallCapsOnline LLC website at www.SmallCapsOnline.com. This material or any portion thereof, may not be reproduced without prior permission from SmallCapsOnline LLC. SmallCapsOnline LLC is not responsible for the contents of this document that is intended for electronic transmission and could be thus subjected to tampering or alteration. Copyright © 1999 by SmallCapsOnline LLC. All rights reserved. |