In 2Q 08, QLT Inc. (QLT) reported decline in revenues from its flagship product, Visudyne, resulting in weak performance of the company during the quarter. Although we anticipate sales of Visudyne to continue to decline, we believe the decline will be at a slower rate relative to previous quarters. Moreover, the company has taken multiple cost cutting and restructuring initiatives to focus on core business while selling off non-core assets and generate additional capital to fund R&D activities and repay the debt. We believe these initiatives will generate significant cost savings, going forward. Although we are concerned about the product pipeline, we have revised our revenue and margin estimates upwards to reflect 2Q 08 performance. Moreover, we believe the NASDAQ common stock is currently undervalued, consequently, we are upgrading QLT’s NASDAQ common stock from a SELL to a BUY.

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