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Neurobiological Technologies' major research effort is being concentrated on Phase III clinical trials of Viprinex(TM) (treatment of acute ischemic stroke), a world-wide market approaching $2 billion. Since our last Update Report, Neurobiological Technologies reported three events important to our rating the Company. First, the royalty agreement for memantine with Merz Pharmaceuticals GmbH (Merz), which was at risk for termination, was extended but reduced. Secondly, the Company has entered into a second collaboration agreement with the Buck Institute for Age Research. This collaboration is focused on early laboratory work being conducted by the Buck Institute to develop a novel therapy for Alzheimer's Disease. And thirdly, the timetable for entering patients into the Viprinex clinical trials and the subsequent interim analysis has been extended for one quarter. This extension results from the Company having to increase the number of clinical sites to enroll sufficient patients. While this slowing of enrollment may be overcome in subsequent quarters, we are concerned that this delay will add costs to the program. Again, if Viprinex's clinical trials are successful, we believe an eventual market capitalization for the Company that is a multiple of the current level is reasonable, and we retain our investment rating on the shares of Strong Speculative Buy. However, the delay in Viprinex patient enrollment in conjunction with the reduction of memantine royalties requires us to lower 12-month price target from $6.00 to $5.00.
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Dutton Associates is one of the largest independent investment research firms in the U.S. Its 30 senior analysts are primarily CFAs, and have expertise in many industries. Dutton & Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.
The cost of enrollment in our one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $87,500 from the Company for 14 Research Reports with coverage commencing on 5/13/02. The Firm does not accept any equity compensation. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.
SOURCE: Neurobiological Technologies
Dutton Associates John Dutton, 916/960-0623
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