Transcept Pharma (TSPT)

We recently initiated coverage of Transcept Pharmaceuticals (<a href=http://www.zacks.com/stock/quote/tspt>TSPT</a>) with an Outperform rating and $12 price target. We think Intermezzo is a product that can fill a much needed void for insomnia patients with chronic nocturnal awakenings. <p> An FDA decision on the pending new drug application is expected in late October 2009. We think approval is a high likelihood event at that time. <p> With the commercialization partner signed and the financial position solid (estimated $95 million on hand), the stock is significantly under-valued, in our view.

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