Zacks Analyst Blog Highlights: Soapstone Networks, Nortel, Extreme Networks, AT&T and Anesiva

Business Wire, April 3, 2008

CHICAGO -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Soapstone Networks, Inc. (Nasdaq: SOAP), Nortel Networks (NYSE: NT), Extreme Networks, Inc. (Nasdaq: EXTR), AT&T, Inc. (NYSE: T) and Anesiva, Inc. (Nasdaq: ANSV).

See the latest posts to the Analyst Blog: http://www.zacks.com/blog/post_info.html?g=6

Here are highlights from Wednesday's Analyst Blog:

Avici Changes Name, Stays a Sell

Soapstone Networks, Inc. (Nasdaq: SOAP) previously known as Avici Systems has changed its name to reflect its focus on developing and marketing virtual Service Control Plane solutions. Although strong end-of-life router sales drove better-than-expected revenue and higher cash balance towards the end of 2007, our long-term outlook for SOAP remains unchanged.

We believe Soapstone offers a unique product and are encouraged by its compatibility with Nortel Networks (NYSE: NT) and Extreme Networks, Inc. (Nasdaq: EXTR). However, we expect revenues to ramp slowly.

Although recent results have been well ahead of expectations, this is a result of AT&T, Inc. (NYSE: T) buying additional routers before Soapstone exited the business. Our price target looks out six months, at which point product revenue for router sales in 2007 will be irrelevant to the company's valuation. With router sales complete, the stock should begin to trade on its current cash position, plus the value of a call option for the Soapstone business.

We estimate that Soapstone will have $91 million in cash and equivalents in six months, or $5.35 per share. Given that a company in the early stages that Soapstone is in, we believe a call option would still be worth very little. We, therefore, retain a Sell rating on the shares and set a price target of $6.50, which is approximately the value of cash and long-term investments on hand and $1.15 for the Soapstone business.

Zingo Adding "Zing" to Anesiva

In the past several months, Anesiva, Inc. (Nasdaq: ANSV) has gained approval for Zingo, unveiled its marketing strategy, prepared for the commercial launch in the second quarter of 2008, formed three alliances for Zingo for the U.S., Europe and Canadian markets, licensed technology to leverage the Zingo platform, moved forward into a phase III program for Adlea, and raised nearly $48 million in cash. We think things are going very well for Anesiva. Management continues to operate according to plan, and 2008 is shaping up to be a banner year.

Yet the stock has languished. Wall Street has yet to take notice and we think that represents an attractive opportunity for small-cap biotech investors.

The approval of Zingo in August 2007 was a major step forward and hurdle cleared for management. Since that time, management has formed a co-promotion partnership with Sagent Pharmaceuticals and outlined the commercialization launch plans. Sagent, although not a household name, is truly an ideal partner for Anesiva on Zingo considering the company's expertise in gain formulary status and its desire to promote specialty products into the hospital market.

We are bullish on Zingo and believe the drug-device has the potential to become the standard of care. Besides the positive developments with Zingo, Anesiva is also staying focused on leading pipeline candidate Adlea.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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