Ladenburg starts Rhythm Pharmaceuticals with Buy rating, $43 price target. Ladenburg Thalmann analyst Michael Higgins initiated coverage of Rhythm Pharmaceuticals with a Buy rating and $43 price target. Rhythm is developing setmelanotide, a novel weight-loss drug for ultra-orphan genetic obesity disorders caused by mutations in the melanocortin-4 receptor signaling pathway, Higgins tells investors in a research note. The analyst urges investors to accumulate a position ahead of upcoming 2019 milestones, particularly pro-opiomelanocortin and leptin receptor deficiency pivotal data in Q3. Target $43.
Wednesday, March 13, 2019
Pacira announces new analysis on intraoperative infiltration with Exparel
Pacira announced new data showing that a patient-optimizing, opioid-sparing enhanced recovery after surgery, or ERAS, pathway, which includes intraoperative infiltration with Exparel, results in high rates of early discharge and patient satisfaction among Medicare-insured patients undergoing total knee or hip arthroplasty, or TKA and THA. Findings also demonstrate that the vast majority of patients do not require more than a 7-day opioid prescription following discharge. The research was detailed during a podium presentation at the American Academy of Orthopaedic Surgeons, or AAOS. Retrospective chart review data were captured for 645 consecutive Medicare patients who underwent primary inpatient TKA or THA between June 1, 2015, and November 16, 2017. All patients followed a procedure-specific ERAS protocol. Overall, 84% of patients were same-day discharged to home, without home services, following their joint replacement and 84.2% did not require any additional opioid prescriptions beyond the initial 7-day prescription provided at discharge. Nationally, 38% of knee replacement patients are still taking opioids two months after surgery.
Celgene ‘still looks like best option’ for Bristol-Myers, says Baird
Baird analyst Brian Skorney notes that on Tuesday, Bristol-Myers (BMY) CEO Giovanni Caforio, speaking at an investor conference, said the company has not had any serious suitors for the company and has not held talks since 2017, when there were no formal offers. In a research note to investors, Skorney says this commentary should help reframe investor expectations as far as what other options Bristol-Myers could explore should the Celgene (CELG) deal fall through, but says Celgene “still looks like the best option.” Skorney has an Outperform rating and $101 price target on Celgene.
Starboard not short Celgene shares, CNBC’s Faber reports
Starboard Value does not have a short position in shares of Celgene (CELG), CNBC’s David Faber reports, citing sources. Starboard has said Bristol-Myers Squibb’s (BMY) planned takeover of Celgene is not in the best interests of its shareholders.
Insys falls after saying may be unable to continue as going concern
Insys Therapeutics shares dropped after the company said it may not be able to continue as a going concern. Insys this morning disclosed in its latest annual filing, “The auditor’s opinion on our audited financial statements for the year ended December 31, 2018 includes an explanatory paragraph stating that our losses and negative cash flows from operations and uncertainty in generating sufficient cash to meet our legal obligations and settlements and sustain our operations raise substantial doubt about our ability to continue as a going concern. While we are pursuing a variety of funding sources and transactions that could raise capital, there can be no assurances that we will be successful in these efforts or will be able to resolve our liquidity issues or eliminate our operating losses. If we are unable to obtain sufficient funding, we would need to significantly reduce our operating plans and curtail some or all of our product development, commercialization and strategic plans. Accordingly, our business, prospects, financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited consolidated financial statements, and it is likely that investors will lose all or a part of their investment. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms or at all.” Shares of Insys dropped 9.5%, or 54c, to $5.14 before being halted for volatility.
Aurora Cannabis spikes after naming Trian’s Peltz as new advisor
Peltz currently serves as the non-executive Chairman of Wendy’s and as a director of P&G, Sysco and MSG
Shares of Aurora Cannabis (ACB) soared after the company said it appointed Nelson Peltz as a strategic advisor.
PELTZ NAMED STRATEGIC ADVISOR: Aurora Cannabis announced Wednesday that it has appointed activist investor Nelson Peltz as a strategic advisor. Peltz will “work collaboratively and strategically to explore potential partnerships that would be the optimal strategic fit for successful entry into each of Aurora’s contemplated market segment,” Aurora said in a statement. The company added that it has granted Peltz options to purchase 19.96M common Aurora shares at a price of C$10.34.
Nelson Peltz is the chief executive officer and a founding partner of Trian Fund Management, a multi-billion dollar investment management firm. Peltz also currently serves as the non-executive Chairman of The Wendy’s Company (WEN) and as a director of Procter & Gamble (PG), Sysco (SYY) and The Madison Square Garden Company (MSG). Peltz commented in the statement that “I believe Aurora has a solid execution track record, is strongly differentiated from its peers, has achieved integration throughout the value chain and is poised to go to the next level across a range of industry verticals.” He added that “I also believe that Canadian licensed producers, and Aurora in particular, are well positioned to lead in the development of the international cannabis industry as regulations evolve, with a strong, globally replicable operating model. I look forward to working with [Aurora Cannabis CEO Terry Booth] and the extended Aurora team to evaluate its many operational and strategic opportunities, including potential engagement with mature players in consumer and other market segments.”
Aurora Cannabis CEO Terry Booth commented that Peltz “is a globally recognized business visionary with a strong track record of constructive engagement to generate accelerated, profitable growth and shareholder value across many industry verticals that are of great interest to us,” adding that “Like us, Nelson also takes a long-term view of value creation to benefit all stakeholders. We look forward to working with Nelson to further extend our global cannabis industry leadership by aligning Aurora with each of the major market segments cannabis is set to impact.”
WHAT’S NOTABLE: Michael Singer, the executive chairman of Aurora Cannabis, told CNBC’s “Squawk Box” in an interview that “We see a number of potential of growth areas, certainly consumer packaged goods.” Specifically, Singer pointed out “The beverage industry, cosmetics, wellness; we see pharmaceuticals now starting to show interest in our space. There are a number of what we call market segments that we expect to operate in with one or many of these potential partners.”
Singer added that Peltz “may have a reputation as the hedge fund activist, but I can tell you our diligence in the numerous face-to-face meetings convinced us that Nelson is someone who proactively works with companies to maximize value for stakeholders.” Asked by Andrew Ross Sorkin whether Peltz’s current or prior relationships with the U.S. consumer goods market played a role in the company’s decisions to team up, Singer said “we don’t see it that way.”
Last month, Aurora Cannabis posted a wider-than-expected second quarter loss of (C$237.8M) but said it sold 6,999kg of cannabis over the three month period, helping revenues rise to C$54.2M.
ANALYST COMMENTARY: GMP Securities analyst Martin Landry upgraded Aurora Cannabis to Buy from Hold and raised his price target to $15 from $9.50. In a research note to investors, Landry said new high profile strategic advisor Peltz could be “instrumental” in facilitating partnership talks with large consumer packaged goods companies. He noted that in addition to the companies he is currently engaged with, Peltz has also been involved with consumer packaging companies like PepsiCo (PEP) and Mondelez (MDLZ).
ANALYST COMMENTARY: GMP Securities analyst Martin Landry upgraded Aurora Cannabis to Buy from Hold and raised his price target to $15 from $9.50. In a research note to investors, Landry said new high profile strategic advisor Peltz could be “instrumental” in facilitating partnership talks with large consumer packaged goods companies. He noted that in addition to the companies he is currently engaged with, Peltz has also been involved with consumer packaging companies like PepsiCo (PEP) and Mondelez (MDLZ).
Last week, Cowen analyst Vivien Azer initiated coverage of Aurora Cannabis with an Outperform rating and C$14 price target. Aurora is “uniquely positioned” to drive leadership in both market share and profitability with the Canadian adult use market in the “early innings,” Azer said. Azer designated Aurora Cannabis as her Top Pick in cannabis, replacing Canopy Growth (CGC), on which she kept a Market Perform rating and a C$29 price target.
Ligand price target raised to $190 from $180 at Roth Capital
Roth Capital analyst Scott Henry raised his price target for Ligand Pharmaceuticals to $190 from $180 following yesterday’s analyst meeting. The company’s base business is better than expected, Henry tells investors in a research note. The analyst upped his 2020 revenue target to $126M from $118M and sees upside to Ligand’s targets based on milestones. He reiterates a Buy rating on the stock.
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