The Zacks Analyst Blog Highlights: Google, Yahoo, Microsoft, ViroPharma and Halozyme Therapeutics

CHICAGO, Aug. 6, 2012 /PRNewswire/ -- 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 Google Inc. (Nasdaq:GOOG), Yahoo Inc (Nasdaq:YHOO), Microsoft (Nasdaq:MSFT), ViroPharma Incorporated (Nasdaq:VPHM) and Halozyme Therapeutics (Nasdaq:HALO).

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Here are highlights from Friday's Analyst Blog:

Google Expands Finland Data Center

Google Inc. (Nasdaq:GOOG) recently announced the expansion of its data center in Finland to meet the fast-growing demand for Internet usage and data storage capacity.

The expansion will involve an additional investment of €150 million ($177 million). The company said that the project will take about 18 months to complete, creating 25 additional positions.

The data center is located in a former paper mill in the south-eastern town of Hamina on the Baltic Sea coast. Google had paid €40 million for its purchase and invested another €160 million on converting and equipping it. The center began its operations in September 2011. The data center uses sea water from the Bay of Finland to reduce its cooling costs.

The need for data center expansion is rising due to growing preferences for cloud computing. Cloud computing allows users to store and process big data at remote data centers instead of their own computers. Hence, expansion of data centers is more likely these days. Google, being no exception, has also expanded its data center to meet the requirement for more data-intensive services such as YouTube and Gmail.

A survey conducted on 100,000 facilities by a data center dedicated website, datacenterdynamics.com, shows that data center usage is expected to grow around 7% in 2012. Moreover, the website has also increased its investment projection for new data centers from about $30.0 billion in 2010-11 to $35.0 billion in 2011-2012.

Recently, Google announced that it will spend more than $300 million to construct its largest Asian data center in Taiwan. The company is scheduled to complete the construction of the Taiwanese center early next year and start operations by the end of 2013.

Google has done very well in the second quarter, with its gross revenue touching a record $12.21 billion. Revenues from both Google-owned and partner sites continued to grow in double digits on a year-over-year basis. Historically, Google has always fared better than Yahoo Inc (Nasdaq:YHOO), which has been struggling to uphold itself, and Microsoft (Nasdaq:MSFT), which is yet to gain critical mass.

However, legal entanglements related to competitive matters or patent infringements remain an overhang. Google retains a Zacks #3 Rank, which translates into a short-term Hold recommendation.

Bad News for ViroPharma

ViroPharma Incorporated (Nasdaq:VPHM) recently announced that the US Food and Drug Administration (FDA) has advised the company and its partner, Halozyme Therapeutics (Nasdaq:HALO), to put the phase II study evaluating the combination subcutaneous Cinryze (C1 esterase inhibitor [human]) and recombinant human hyaluronidase enzyme (rHuPH20) on temporary clinical hold.

The Center for Biologics Evaluation and Research (CBER) division of the FDA informed the companies that the US regulatory body is assessing the potential risk of the long-term effect of anti-rHuPH20 non-neutralizing antibodies associated with the use of Halozyme's rHuPH20. The FDA detected some risks pertaining to rHuPH20 in a separate study without Cinryze.

Halozyme informed ViroPharma that it must first provide results from additional pre-clinical studies to the CBER before they can resume the on-hold combination study. The US regulatory body also mentioned that the problem does not specify Cinryze and ViroPharma can continue evaluating subcutaneous administration of Cinryze without rHuPH20.

ViroPharma has decided to inform the European regulatory authorities of the FDA's action. The company has also decided to postpone its enrollment process in Europe for the phase II combination study of Cinryze and rHuPH20, until the FDA confirms the safety of the latter.

Following the FDA's decision, ViroPharma is set to commence a phase II study, evaluating the safety and efficacy of two different doses of the subcutaneous administration of Cinryze as a stand-alone therapy. The US regulatory body cleared ViroPharma's Investigational New Drug (IND) application for the stand-alone therapy of Cinryze in 2011.

ViroPharma recently announced positive results from an open label prophylaxis study of Cinryze in patients suffering from hereditary angioedema (HAE).

We note that Cinryze is approved both in the US and Europe. In the US the drug is approved as intravenous (IV) administration for routine prophylaxis against angioedema attacks in adolescent and adult patients with HAE. In Europe it is approved for routine prevention, pre-procedure prevention and acute treatment of angioedema attacks in adolescent and adult patients with HAE.

Our Take

We currently have a Neutral recommendation on ViroPharma. The stock carries a Zacks #3 Rank (Hold rating) in the short run.

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