Merrill ups Axcan Pharma to neutral

Axcan Pharma Inc.'s rating was upgraded to neutral by Merrill Lynch analyst Hari Sambasivam, who gave the company a theoretical 12-month fair value of $12 to $16. The company had been downgraded to sell in February after the failure of its phase 3 trial for ITAX in functional dyspepsia. Sambasivam said, however, that the possibility of failure in the company's pending North American phase 3 trial is already factored into the current share levels and discussions with clinicians indicate that ITAX might be developed for niche indications, suggesting it is premature to write off the drug. Shares of the Mont-Saint-Hilaire, Quebec-based pharmaceutical company were up 50 cents, or 3.85%, at $13.50 on volume of 537,286 shares versus the three-month running average of 689,852 shares.

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