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UPDATE 1-RESEARCH ALERT-Brean Murray upgrades Adolor to buy

Mon Sep 8, 2008 10:39am EDT

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(Recasts; adds details, share movement)

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Sept 8 (Reuters) - Brean Murray Carret & Co upgraded Adolor Corp (ADLR.O) to "buy" from "hold," based on an optimistic view on the company's bowel drug, Entereg.

Shares of the Exton, Pennsylvania-based company were trading up 16 cents at $3.22 on Nasdaq, after touching $3.42 earlier in the session.

Entereg, or alvimopan, was approved by the U.S. Food and Drug Administration in May for the treatment of post-operative ileus (POI), gastrointestinal problems that could result from bowel surgery.

"Since Entereg was shown in pivotal trials to shorten costly hospital stays by almost a day for POI patients and proved to be safe, we believe the drug is worth prescribing," Brean Murray analyst Jonathan Aschoff said in a note to clients.

Entereg is in late-stage clinical development for chronic opioid bowel dysfunction (OBD).

Last week, GlaxoSmithKline (GSK.L) (GSK.N) returned to Adolor worldwide rights related to Entereg for chronic OBD.

"We believe any downside driven by the uncertainties regarding this program is fully factored into the valuation," Aschoff added. He has a price target of $6 on the stock. (Reporting by Suzannah Benjamin in Bangalore; Editing by Jarshad Kakkrakandy)

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