Achillion Pharmaceuticals, Inc. (ACHN)

NetscribePhrmtcl (96.34) Submitted: 3/20/2007 8:42:53 AM : Start Price: $7.06 ACHN Score: +54.12

Achillion is a biopharmaceutical company focused on the discovery, development and commercialization of treatments for infectious diseases. Within the anti-infective market, the company concentrates on the development of antivirals and antibacterials. It is targeting the antiviral development efforts on treatments for HIV infection and chronic hepatitis C, and is directing its antibacterial development efforts toward treatments for serious hospital-based bacterial infections.

Its two lead drug candidates are Elvucitabine, which is in the Phase II clinical trials in HIV-infected patients, and ACH-806, which the company is evaluating in collaboration with Gilead Sciences in a Phase I clinical trial for the treatment of chronic hepatitis C. The company is also evaluating its third drug candidate, ACH-702, in late-stage, pre-clinical studies for the treatment of serious hospital-based bacterial infections.

Revenues witnessed a sharp 91% decline for the quarter ended September 2006. The decrease in 2006 is the result of a reduction in milestone payments under collaboration with Gilead Sciences. Net loss applicable to common shareholders increased 71%, reflecting a sharp increase in R&D expenses and administrative costs. The company has incurred losses of $100 million from inception to September 2006 and had an accumulated deficit of $113.6 million through September 30, 2006.

Achillion appears to be a weak investment proposition based on the delay in the expected development timeline for the HIV & HCV program. The launch of a replicase inhibitor for HCV is expected to be in 2011, rather than 2010, which would hamper the company’s near term earning prospects.