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The Zacks Analyst Blog Highlights: Sangamo BioSciences, Biogen Idec, Shire, Actelion and eHealth

January 14, 2014

CHICAGO, Jan. 14, 2014 /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 the Sangamo BioSciences, Inc. (Nasdaq:SGMO-Free Report), Biogen Idec (Nasdaq:BIIB-Free Report), Shire (Nasdaq:SHPG-Free Report), Actelion (OTC:ALIOF-Free Report) and eHealth, Inc. (Nasdaq:EHTH-Free Report).

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Here are highlights from Monday’s Analyst Blog:

Sangamo and Biogen Tie Up

A lot of pharmaceutical companies enter into collaboration and license agreements to obtain funding for research and development programs, to leverage technological knowhow as well as gain access to marketing expertise.

Sangamo BioSciences, Inc. (Nasdaq:SGMO-Free Report) recently entered into a worldwide collaboration and license agreement with Biogen Idec (Nasdaq:BIIB-Free Report).

The deal primarily focuses on the development of therapeutics for hemoglobinopathies which results from the abnormal structure or underproduction of hemoglobin.

The agreement will enable Biogen to leverage Sangamo’s proprietary genome-editing technology platform to develop treatments targeting sickle cell disease and beta-thalassemia.

As per the agreement, Sangamo will be responsible for all research and development work through the first clinical trial in beta-thalassemia / the sickle-cell disease program. Both the companies will work together to submit an Investigational New Drug (IND) application for sickle-cell disease.

In addition, Sangamo retains an option to co-promote any licensed product to treat sickle-cell disease and beta-thalassemia in the U.S. while Biogen will be responsible for the clinical development and commercialization of products arising from the alliance on a worldwide basis.

Sangamo will earn a $20 million upfront payment. Biogen will fund all the internal and external research and development program related costs. Moreover, Sangamo will receive additional milestone payments of approximately $300 million.

Meanwhile, Sangamo expects to file an IND for hemophilia A and B with its collaboration partner Shire (Nasdaq:SHPG-Free Report) and for beta-thalassemia with Biogen in 2014. The company also plans to submit an IND for its HIV candidate in in 2014. Further, Sangamo intends to file an IND for Hunginton’s disease with Shire in 2015.

The collaboration agreements with Biogen and Shire bodes well for Sangamo and we look forward to updates on IND applications in 2014.

Sangamo currently carries a Zacks Rank #2 (Buy). Investors may also consider Actelion (OTC:ALIOF-Free Report) at current levels, carrying Zacks Rank #1 (Strong Buy).

Sneak Preview of eHealth’s Q4 Results

Shares of eHealth, Inc. (Nasdaq:EHTH-Free Report) has been on an uptrend since the private health insurance exchange announced its preliminary results for the fourth quarter and full year 2013 on Jan 8. Its share price has gained nearly 24% since then.

eHealth noted that demand for its Individual & Family Plan (IFP) product increased substantially in the fourth quarter. As such, it estimated that submitted applications for its IFP product surged almost 50% in the fourth quarter. The company also predicted fourth-quarter submitted applications for total Medicare products increased more than 65% while submitted applications for Medicare Advantage product increased more than 35% over the year-ago period.

These are expected to drive fourth-quarter revenues to a range of $53 to $55 million, and in turn, boost full-year revenues to a range of $178 million to $180 million. The top line for 2013 is likely to figure above the company guidance of $168 million to $174 million.

For full year 2013, earnings are estimated to be between 34-41 cents per share, well above the Zacks Consensus Estimate of 24 cents. The bottom line may, however, fail to meet the company’s guidance of 61-71 cents per share.

Earnings before interest, depreciation and amortization (EBITDA) for full year 2013 is estimated in the range of $16.0-$18.0 million, below the company’s guidance of $23-$29 million.

eHealth estimates fourth-quarter bottom line to range between loss of 3 cents and earnings of 4 cents, shy of the Zacks Consensus Estimate of earnings of 6 cents. EBITDA for the fourth quarter is estimated to be in the range of $1 – $3 million.

With respect to earnings performance, eHealth delivered a positive earnings surprise in one of the last three reported quarters while managing to meet the Zacks Consensus Estimate in the other two. However our proven model does not conclusively show that eHealth is likely to beat earnings this quarter. This is because a Zacks Rank #3 (Hold) combined with an Earnings ESP of -83.3% makes prediction difficult.

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