Monday, April 18, 2011

Flamel Technologies S.A. (NASDAQ: FLML) Q2 2011 Price Target

Recent price: 5.80$
P/E Ratio: -
3 Months Target Price: 7.50$

Company Description
Flamel Technologies S.A. is a biopharmaceutical company principally engaged in the development of two polymer-based drug delivery technologies. The Company’s nanoparticle Medusa technology is designed to provide controlled release following injection of therapeutic proteins, peptides and other large and small molecules. It also has developed a microparticule adaptation of the Medusa platform. Its Micropump technology is a multiparticle technology for oral administration of small molecule drugs with applications in controlled-release, taste-masking and bioavailability enhancement. Flamel’s Trigger-Lock technology is an adaptation of Micropump designed to minimize the misuse and abuse of medications subject to abuse. The Company develops specific applications of its controlled release technologies in partnership with biotechnology and pharmaceutical companies.

Confidence Margins
Strong resistance $8.12 (+40%)
Light resistance $7.35 (+27%)
Light support $5.09 (-12%)
Strong support $4.50 (-22%)

Year end results proved to be quite a disappointment for Flamel Technologies S. A. This led investors to surrender their shares at a rapid pace. Current prices offer a very attractive position and interesting returns. Acquiring them now will prove great if the stocks does not go under 10%.

Entry strategy
For the cautious investor:
Buy the stock for 6$ or less.

For the risk-taking trader:
The September 2011 7.50$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 55$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 7.50$, or keep it until 8$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 7.50$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

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