Zacks Bull and Bear of the Day Highlights: Onyx Pharmaceuticals, Salix Pharmaceuticals, Qiagen N.V., Magellan Midstream Partners and VeriFone Holdings

Business Wire,  May 8, 2008  

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CHICAGO -- Zacks Equity Research highlights Onyx Pharmaceuticals (Nasdaq: ONXX) as the Bull of the Day and Salix Pharmaceuticals (Nasdaq: SLXP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Qiagen N.V. (Nasdaq: QGEN), Magellan Midstream Partners (NYSE: MMP) and VeriFone Holdings, Inc. (NYSE: PAY). Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day: Onyx Pharmaceuticals (Nasdaq: ONXX)

Onyx delivered strong financial performance of Nexavar in 1Q08. This is mainly attributed to the market penetration in the liver cancer market while Nexavar market share in kidney cancer market has stabilized due to heavy competition from Pfizer and Wyeth. We believe Nexavar sales will continue to grow over the next several years since the label has expanded to liver cancer. In addition to the US and EU, Nexavar has been approved in South Korea for liver cancer and will be approved in China in 2H08 for liver cancer.

Nexavar has the potential to become a blockbuster for Onyx. Current price is attractive, therefore, we upgrade Onyx shares to Buy from Hold with a price target of $46 per shares.

Bear of the Day: Salix Pharmaceuticals (Nasdaq: SLXP)

Salix Pharmaceuticals is a specialty pharmaceutical company engaged in acquiring, developing and commercializing prescription drugs used in the treatment of a variety of gastrointestinal diseases. The company suffered a major setback in December 2007 when the FDA granted approval to three generic versions of lead product, Colazal. This is devastating news for Salix as Colazal was a significant contributor to both the top-and bottom-line.

As such, we expect 2008 to be an extremely challenging year for the company with a significant decline in both revenues and earnings. While new product launches and new indications for Xifaxan should support a recovery in revenues in 2009, we do not expect earnings to recover prior to 2010. We maintain a Sell rating with a target price of $5.

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Qiagen N.V. (Nasdaq: QGEN)

Qiagen N.V. produces and distributes biotechnology products and services primarily for separating and purifying nucleic acids (DNA/RNA). The company, through its subsidiaries in Europe, Asia, Australia, Canada and the U.S., operates in the life sciences industry with a portfolio of more than 500 products and automated solutions.

Though the molecular diagnostic and research market offer enormous growth, the company faces stiff competition. We would like to see their research spending stabilize before we recommend the shares.

We maintain our Hold rating for Qiagen with a target price of $24 per share based on strong financial performance in the third quarter of the fiscal 2007. Both 2005 and 2006 were eventful years with the company entering into several acquisitions and partnerships which should help drive growth in 2008 and beyond.

Magellan Midstream Partners (NYSE: MMP)

Magellan Midstream Partners' first-quarter 2008 results came in better than expected, with operating earnings up 22% from the year-earlier level, excluding contribution from the insurance settlement. Importantly, the partnership raised its quarterly distribution for the 28th consecutive quarter to the annualized run rate of $2.69 per unit, up 9% year over year.

Distributable cash flows were up 23% from the year-earlier level, representing a coverage ratio of 1.13x for the quarter. Management reiterated their goal of 8% to 10% annual distribution growth through 2010.

VeriFone Holdings, Inc. (NYSE: PAY)

Last month, VeriFone Holdings, Inc. announced that it completed its independent investigation into certain accounting and financial control matters. Earlier, on December 3, 2007, PAY announced a major restatement of its fiscal results for the first, second, and third quarters of FY2007, resulting in significant lowering of its nine-month operating results. The restatement involves both lower inventory levels and increase in cost of goods (lower gross and operating margins).

We estimate that the restatement impacted the nine-month period profitability roughly by negative 20%. It also opens up the possibility of restructuring within the company. As part of its renegotiations with its debt holders, VeriFone agreed to pay an additional 0.25% per annum on its term-loan and credit facility in addition to a 0.25% one-time fee. We believe that this translates to roughly $0.6 million a year of interest expense (on the July 31 balance of $237.5 million).

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

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

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