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Goldman Sachs analysts reveal new ratings for Forest and BMS

Goldman Sachs analysts have revised ratings for Forest Laboratories and Bristol-Myers Squibb

Goldman Sachs analysts have changed recommendations to investors for US-based Forest Laboratories and Bristol-Myers Squibb (BMS).

One in-house analyst said that the fundamental challenges facing Forest are now reflected in the share price, adding that the long-term growth concerns over upcoming patent expirations for key products, coupled with uncertain pipeline catalysts, had prompted a rating change from "Sell" to "Neutral".

Since being added to Goldman's Sell list on 10 October 2007, Forest's shares had dropped 27 per cent, so the firm had lowered its 12-month price target USD 3 to USD 45 per share.

Positive risks to the price target and estimates from Goldman included unforeseen drug developments in the pipeline, improved sales performance and positive mergers and acquisitions developments.

In morning trading on 4 September 2007, Forest's shares rose 2.5 per cent to rest at USD 38.58.

In a separate evaluation, Goldman analysts said that BMS management had been successfully managing costs, diversifying the pipeline risk though partnerships and invest in the pipeline.

However, they added that BMS' patent gaps were 'substantial'. The firm's platelet anti-aggregant Plavix (clopidogrel) and blood pressure drug Avapro/Avalide (irbesartan) will both lose patent protection in 2017, and will degrade long-term growth.

Goldman analysts rated BMS as a "Sell" and the 12-month price target was set at USD 30. In early trading on 4 September 2007, shares in BMS fell 0.5 per cent to settle at USD 29.01.

5th September 2007

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