Roth Capital Partners has upgraded ANI Pharmaceuticals (NASDAQ:ANIP) to ”buy” from “neutral” but lowered its price target to $60 from $67. The stock closed at $43.21 on Friday.
“We are upgrading shares of ANI Pharmaceuticals … based on a significant reduction in valuation despite sound fundamentals,” writes analyst Scott Henry, adding the reduced price target reflects more conservative EPS multiples for the sector.
After an approximate 25% drop in the stock price last week, Mr. Henry figures the valuation is again compelling. “Catalysts to revalue the shares higher include new pipeline expansion with corticotropin, market share gains for EEMT, and stabilization of current negative sentiment,” he added.
Mr. Henry attributed ANI’s stock price decline to the market souring on companies that sell high priced drugs. “This timing was not fortunate for ANI’s acquisition of rights to the high-priced Acthar Gel competitor. We believe that this negative sentiment creates a long-term opportunity for ANI shares,” he said.
ANI paid Merck about $75-million for an approved NDA for corticotropin, which is similar to Acthar Gel from Mallinckrodt for the treatment of multiple sclerosis, rheumatic disorders, dermatologic diseases, and other ailments.
He said the compound has an estimated $200-million in yearly revenue potential, with a launch targeted in the second half of 2017.