The Zacks Analyst Blog Highlights:ViroPharma Inc, Halozyme Therapeutics, Lockheed Martin Corporation, The Boeing Company and General Dynamics Corporation

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Nov 15, 2012, 08:32 ET

CHICAGO, Nov. 15, 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 ViroPharma Inc (VPHM), Halozyme Therapeutics (HALO), Lockheed Martin Corporation (LMT), The Boeing Company (BA) and General Dynamics Corporation (GD).

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Today, Zacks is promoting its ''Buy'' stock recommendations. Four daily picks are offered free.

Here are highlights from Thursday's Analyst Blog:

ViroPharma Presents Cinryze Data

ViroPharma Inc. (VPHM) presented promising data on Cinryze at the American College of Allergy, Asthma and Immunology's (ACAAI) annual congress. Data was presented from a post marketing study that evaluated the safety, tolerability and efficacy of Cinryze in escalating doses in patients with hereditary angioedema (HAE), who did not show sufficient treatment benefit with 1000 units every 3 or 4 days.

The open-label multicenter study enrolled 20 patients over a span of 3 years. It was observed that doses up to 2500 units every 3 or 4 days can be prescribed to patients who show insufficient response to bi-weekly 1000 units. Additionally, Cinryze was found to be well tolerated and side effects observed were consistent with previous studies.

We note that Cinryze is approved both in the US and Europe. In the US, the drug is approved 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.

The company is also evaluating the subcutaneous administration of Cinryze in combination with its partner, Halozyme Therapeutics' (HALO) recombinant human hyaluronidase enzyme (rHuPH20). In September 2012, the US Food and Drug Administration (FDA) removed a clinical hold on the phase II study. The company plans to initiate a phase II study in the EU shortly.

In the third quarter of 2012, Cinryze's net sales climbed 30.4% y/y to $85.3 million, driven by higher demand. Bulk of the sales ($84 million) came from the US. US sales were reflective of patient demand ($82 million) and inventory build up ($2 billion), according to management.

Recommendation

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

We are encouraged by Cinryze's sales growth and patient additions in the third quarter of 2012. However, we remain concerned about the lack of late-stage pipeline candidates and the company's dependency on Cinryze for growth.

Lockheed Acquires Chandler/Ray

Lockheed Martin Corporation (LMT) announced the acquisition of Chandler/May Inc., an unmanned aerial systems manufacturer. Terms of the agreement, however, remained undisclosed. Chandler/May, with facilities in Alabama and California, will become part of Lockheed's Mission Systems & Sensors business. Lockheed Martin's prudent acquisition of Chandler/May would expand its expertise in the design, development, integration, manufacturing, and support of fully integrated mission critical systems for unmanned aerial systems ("UAS") and Command, Control, Communications, Computers, Intelligence, Surveillance, Reconnaissance ("C4ISR") missions.

Based in Bethesda, Maryland, Lockheed Martin is a global security and aerospace company, engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. Key growth drivers of the company are its focus on debt repayment, its ongoing share repurchase program and the incremental dividend. Some of Lockheed Martin's main competitors are The Boeing Company (BA) and General Dynamics Corporation (GD).

Lockheed Martin recently reported strong third quarter numbers with earnings of $2.26 per share beating the Zacks Consensus Estimate of $1.85. With this the company also beat the year-ago earnings of $2.06 per share.

Lockheed Martin reported quarterly revenue of $11.9 billion, beating the Zacks Consensus Estimate of $11.1 billion. However, the figure fell below the year-ago quarterly revenue of $12.1 billion.

During the third quarter, the company repurchased 3.3 million shares at a cost of $294 million. In September this year, the company increased its quarterly dividend rate to $1.15 per share, up approximately 15 cents from the current payout of approximately $1.00 per share. The proposed hike would bring the annual dividend to $4.60, up 15% from the previous payout. The increased quarterly dividend will be paid on December 28, 2012 to shareholders of record at the close of business on December 3, 2012.

Going forward, we believe Lockheed Martin has significant upside potential based on the Obama administration's focus on Intelligence Surveillance Reconnaissance ("ISR"), unmanned systems, force protection, cybersecurity, and missile defense. It already sits on an order backlog of approximately $75.6 billion at the end of the first nine months of 2012.

Further, we expect shareholder return to continue to be shored up by the company's focus on debt repayment, its ongoing share repurchase program and the incremental dividend.

However, we are concerned about the budget deficits and political uncertainty that make future defense budgets vulnerable to cutbacks. Lockheed Martin presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

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