NEW YORK (AP) – Shares of Parexel International Corp. climbed to an annual high after the pharmaceutical research contractor said it is winning more business than it previously expected, and raised its estimates for the fiscal year.
The Waltham, Mass., company said its drug development and late-stage clinical testing are doing more business in all regions. Both of those divisions took a hit as the economy slumped and drugmakers cut back on their spending. Parexel’s orders were stronger than expected during the December quarter, as the company said it received $141 in orders for every $100 in orders it filled.
Analysts said the company previously expected a ratio of $125 in new orders per $100 that were filled.
In afternoon trading, Parexel stock rose $3.18, or 18 percent, to $20.72. Earlier it peaked at $21.10, the stock’s highest price since October 2008.
Jefferies & Co. analyst David Windley said Parexel is benefiting from recent mergers among drugmakers, including last year’s tie-ups between Pfizer Inc. and Wyeth, and Merck & Co. and Schering-Plough Corp., along with new partnerships, increased outsourcing, and more funding from biotechnology companies as the economy improves.
Windley said Parexel’s comments about the drug development and late-stage businesses are “the first time we have heard such a positive statement regarding demand.” He said the company is in position to report stronger profit and revenue growth than its rivals for the rest of the year.
Windley kept a “Buy” rating on Parexel shares.
Meanwhile, Raymond James analyst Alexander Draper upgraded the stock to “Outperform” from “Market Perform.” Both analysts have price targets of $20 per share.
For the current fiscal year, which ends in June, Parexel raised its profit forecast to a range of $1 to $1.06 per share from 90 cents to $1 per share, and it now expects $1.13 billion to $1.15 billion in revenue, from $1.12 billion to $1.15 billion. It also gave a third-quarter outlook that was slightly above analyst expectations.
Date: January 26, 2010
Source: Associated Press
Filed Under: Drug Discovery