Xenova "Outstanding Long-Term Investment"

Xenova Ltd is an outstanding investment for long-term drug discovery, according to a report by Stewart Adkins, Ian Smith and Jo Walton of Lehman Brothers. In addition, say the analysts, the company is relatively undervalued, with its current market value of $82.1 million being at the bottom-end of a range of quoted molecular diversity companies whose capitalization extends up to $220 million.

The reason for this is probably an undervalued portfolio, they note. The company has a discovery and preclinical development portfolio which includes both proprietary and collaborative projects based on chemical diversity in microbes and plants.

Xenova's strategy is to construct a portfolio of discovery projects supporting a pipeline of drug leads. Its current therapeutic focus is in the areas of cancer, cardiovascular, immunology and the central nervous system. To aid in the discovery of lead compounds the company has developed the "ASSET" (advanced screening technology) system, which allows it to screen very large numbers of microbial culture fractions in automated bioassays which incorporate an appropriate molecular target.