Here are highlights from Monday's Analyst Blog:

XenoPort Drug May Have "Legs"

We consider XenoPort Inc.'s (Nasdaq: XNPT) restless leg syndrome (RLS) drug candidate, XP-13512 (to be called Solzira in the U.S.), to be a potential blockbuster opportunity. The data has been highly encouraging and XP-13512 could launch in late 2009. XenoPort is partnered with GlaxoSmithKline (NYSE: GSK) for development and commercialization in the U.S. and select countries outside the U.S.

As for now we are holding off on modeling sales in neuropathic pain and migraine until we see more data. However, we believe that if XenoPort can see Solzira to commercialization, it will improve the future partnering plans for other compounds such as XP-19986 for gastroesophageal reflux disease, and allow management to move forward with other candidates such as the intravenous anesthetic XP-20925.

XenoPort stock is down 25 percent year-to-date and some 35 percent on several concerns. We think the market is coming to grips with the power XenoPort's Transported Prodrug technology.

Pfizer's (NYSE: PFE) Lyrica could represent significant competition to Solzira in the RLS market. The overall market conditions have been poor, specifically with respect to volatile names in the biotechnology market, and even more so with stocks that had outstanding past performance as investors are looking to book profits on their winners.

Buy Sempra Energy on Value

Impressive results in the first quarter, led by strong performance in its utilities pipelines and storage business, conclusion of general rate cases, operational REX-West, launch of its commodities joint-venture, and completion of its Baja California liquefied natural gas (LNG) terminal, collectively support the bullish outlook for Sempra Energy (NYSE: SRE).

Looking ahead, with the initiation of a $1 billion share repurchase program, new solar power contracts and a recently increased $1.40 annual dividend, we see consistent growth in earnings power. However, we note that the company may face difficulties from a higher level of capital expenditures. Nevertheless, in a valuation call given a discount in forward earnings valuation, we maintain our Buy recommendation on SRE with a six-month target price of $60.75, or 16.4x our 2008 EPS estimate and 13.3x our forward 2009 estimate.

SRE appears to be relatively well-positioned to benefit from core electric and natural gas operations, wholesale energy commodities marketing and trading, development of LNG resources, and earnings accretive acquisitions. Financially, the company's 9% dividend increase to an annual rate of $1.40 per share in May 2008. This may attract conservative income-seeking investors.

The SRE common stock trades at only 15.0x and 12.1x, respectively, our 2008 and 2009 earnings per share estimates, or at a moderate discount to the natural gas distribution industry. We attribute the stock's current earnings-based discount valuation to the uncertainty surrounding the lack of visibility into regulatory proceedings, declining business from the company s natural gas operations, as well as a below-industry average dividend yield.

We see earnings growth through 2009 driven by impressive profitability at one of its components, San Diego Gas & Electric, Federal Energy Regulatory Commission's approval of the Rockies pipeline project, the joint venture with the Royal Bank of Scotland (NYSE: RBS) and additional asset sales.

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To access the live conference call via phone, dial 1-888-275-3514. International callers may access the live call by dialing 706-679-1417. The reference number to enter the call is 56384106.

The replay of the conference call may be accessed that same day after 8:00 p.m. Eastern Time, via the Internet, at www.XenoPort.com, or via phone at 1-800-642-1687 for domestic callers, or 706-645-9291 for international callers. The reference number to enter the replay of the call is 56384106.

About XenoPort

XenoPort, Inc. is a biopharmaceutical company focused on developing a portfolio of internally discovered product candidates that utilize the body's natural nutrient transport mechanisms to improve the therapeutic benefits of existing drugs. Its development and commercialization efforts are currently focused on potential treatments of central nervous system disorders. XenoPort's most advanced product candidate, XP13512, which is known as Solzira(TM) in the U.S., has successfully completed three pivotal trials in its Phase 3 clinical program for the treatment of moderate-to-severe primary restless legs syndrome, or RLS. It has also successfully completed a Phase 2a clinical trial for the management of post-herpetic neuralgia and is currently being evaluated by XenoPort's partners, Astellas Pharma Inc. and GlaxoSmithKline, in Phase 2 clinical trials as a potential treatment for neuropathic pain and by Astellas in a Phase 2 clinical trial as a potential treatment for RLS. XenoPort has reported positive results from a Phase 2a clinical trial of its second product candidate, XP19986, in patients with gastroesophageal reflux disease, or GERD, and is currently conducting a second Phase 2 clinical trial in GERD patients. It is also evaluating XP19986 as a potential treatment of patients with spasticity related to spinal cord injury. XenoPort's third product candidate, XP21279, has been evaluated in a Phase 1 clinical trial that showed positive data for its use as a potential treatment for Parkinson's disease.

To learn more about XenoPort, please visit the Web site at www.XenoPort.com.

XenoPort is a registered U.S. trademark

Solzira is a U.S. trademark of GSK.

XNPT2F

SOURCE: XenoPort, Inc.

XenoPort, Inc.
Jackie Cossmon, 408-616-7295
ir@XenoPort.com

Until earlier this month, Mr. Lofberg was president and chief executive officer of Merck Capital Ventures, LLC, a subsidiary of Merck & Co., Inc., which invested in companies with technology-based solutions for the pharmaceutical industry. Prior to 2000, he was Chairman of Merck-Medco Managed Care, LLC, a wholly-owned subsidiary of Merck & Co., Inc., the country's largest provider of prescription drug benefit management services, with responsibility for administering prescription drug plans for over 50 million Americans covered through employers, unions, insurance companies, HMOs and state and federal programs.

Mr. Lofberg joined Medco in 1988 and was senior executive vice president - strategic planning and marketing, a member of the Office of the President and a director of the company prior to the acquisition of Medco by Merck in 1993. Previously, he spent 15 years with the Boston Consulting Group, Inc. in Boston, New York and Munich. He was the partner in charge of the firm's New York office and responsible for the worldwide practice in health care.

Mr. Lofberg has an M.S. degree from the Graduate School of Industrial Administration at Carnegie Mellon in Pittsburgh, Pennsylvania, and an undergraduate degree from the Stockholm School of Economics in Sweden.

About XenoPort

XenoPort, Inc. is a biopharmaceutical company focused on developing a portfolio of internally discovered product candidates that utilize the body's natural nutrient transport mechanisms to improve the therapeutic benefits of existing drugs. Its development and commercialization efforts are currently focused on potential treatments of central nervous system disorders. XenoPort's most advanced product candidate, XP13512, which is known as Solzira(TM) in the U.S., has successfully completed three pivotal trials in its Phase 3 clinical program for the treatment of moderate-to-severe primary restless legs syndrome, or RLS. It has also successfully completed a Phase 2a clinical trial for the management of post-herpetic neuralgia and is currently being evaluated by XenoPort's partners, Astellas Pharma Inc. and GlaxoSmithKline, in Phase 2 clinical trials as a potential treatment for neuropathic pain and by Astellas in a Phase 2 clinical trial as a potential treatment for RLS. XenoPort has reported positive results from a Phase 2a clinical trial of its second product candidate, XP19986, in patients with gastroesophageal reflux disease, or GERD, and is currently conducting a second Phase 2 clinical trial in GERD patients. It is also evaluating XP19986 as a potential treatment of patients with spasticity related to spinal cord injury. XenoPort's third product candidate, XP21279, has been evaluated in a Phase 1 clinical trial that showed positive data for its use as a potential treatment for Parkinson's disease.

To learn more about XenoPort, please visit the Web site at www.XenoPort.com.

Forward-Looking Statements

This press release contains "forward-looking" statements, including, without limitation, all statements related to the company's future clinical development and commercialization plans; the suitability of XP19986 as a treatment for GERD and spasticity; and the suitability of XP21279 as a treatment for Parkinson's disease. Words such as "anticipates," "vision," "could," "will," "intends," "potential" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon XenoPort's current expectations. Forward-looking statements involve risks and uncertainties. XenoPort's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to the uncertain results of clinical trials; XenoPort's or its partners' ability to successfully conduct clinical trials in the anticipated timeframes, or at all; the uncertainty of the FDA approval process and other regulatory requirements; XenoPort's dependence on its current and additional collaborative partners; and the uncertain therapeutic and commercial value of its compounds. These and other risk factors are discussed under the heading "Risk Factors" in XenoPort's Annual Report on Form 10-Q for the quarter ended March 31, 2008, filed with the Securities and Exchange Commission on May 8, 2008. XenoPort expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

XenoPort is a U.S. trademark of XenoPort, Inc.

Solzira is a U.S. trademark of GSK.

XNPT2G

SOURCE: XenoPort, Inc.

XenoPort, Inc.
Jackie Cossmon, 408-616-7220
ir@XenoPort.com

A replay of the Webcast can be accessed for a minimum of one week and will be available approximately 24 hours after the live presentation.

About XenoPort

XenoPort, Inc. is a biopharmaceutical company focused on developing a portfolio of internally discovered product candidates that utilize the body's natural nutrient transport mechanisms to improve the therapeutic benefits of existing drugs. Its development and commercialization efforts are currently focused on potential treatments of central nervous system disorders. XP13512, also known as Solzira(TM), is XenoPort's most advanced product candidate. It has successfully completed three pivotal trials in its Phase 3 clinical program for the treatment of moderate-to-severe primary restless legs syndrome, and has successfully completed a Phase 2a clinical trial for the management of post-herpetic neurolgia. XenoPort has reported positive results from a Phase 2a clinical trial of its second product candidate, XP19986, in patients with gastroesophageal reflux disease. XenoPort has also reported positive results from a Phase 1 clinical trial of its third product candidate, XP21279, which is being developed as a potential treatment for Parkinson's disease.

To learn more about XenoPort, please visit the Web site at www.XenoPort.com.

XenoPort is a registered U.S. trademark.

Solzira is a U.S. trademark of GlaxoSmithKline.

XNPT2G

SOURCE: XenoPort, Inc.

XenoPort, Inc.
Jackie Cossmon, 408-616-7220
ir@XenoPort.com