Pharmasset shares up; analysts upbeat on hepatitis candidate

Merriman Curhan Ford analyst Brian McCarthy noted that hepatitis candidate, R7128, is slated to enter a midstage study in the fourth quarter of the year. He rates the shares "Buy."

He believes that Pharmasset's current share price doesn't account for positive R7128 data, the company's other programs and partnerships, upcoming clinical milestones, and the potential for generating revenue.

JMP Securities Liisa A. Bayko is also upbeat about Pharmasset. She said that Roche currently has a hepatitis C drug of its own, R1626, but it has been plagued by toxicity concerns. She believes that Roche might put R1626 on the back burner due to the concerns with the drug in favor of R7128.

"In our mind, this could be the biggest catalyst for shares of Pharmasset this year," Bayko said.

She rates Pharmasset shares "Buy" with a $35 price target.

On Thursday, Pharmasset said its first-quarter loss widened on a decrease in collaborative payments and higher costs for its hepatitis B program.

Shares of Pharmasset rose $1.05, or 6.4 percent, to $17.45.