Lake Street analyst Brooks O’Neil says BioScrip’s outlook remains positive despite Friday’s “disappointing” Q4 results and “unexpected” all-stock merger with Option Care. The combined company can deliver high single digit revenue growth and in the range of $175M of 2019 adjusted EBITDA pre- synergies, O’Neil tells investors in a research note. Further, while management has committed to $60M of synergies, the analyst thinks “there could be much more, certainly over several years.” His analysis can get to a $3.50 per share valuation for BioScrip “without stretching too far.” O’Neil keeps a Buy rating on the stock with a $3.50 price target.
Monday, March 18, 2019
William Blair upgrades Dentsply Sirona after encouraging dental conference
William Blair analyst John Kreger upgraded Dentsply Sirona to Outperform from Market Perform following what he viewed as a positive International Dental Show. This year’s IDS featured PrimeScan, which garnered favorable anecdotal feedback, an updated SureFil restorative offering that decreases the time per restoration by up to ten minutes, and a greater number of people at the Dentsply Sirona booths compared to two years ago, Kreger tells investors in a research note. If Dentsply Sirona can recapture lost margin and market share from the past two years, there is “significant potential” for a rebound in earnings power over the next three years, the analyst contends. He sees stabilization in the company’s base business and was encouraged what by what he saw at the International Dental Show.
Coherus reports CMS approves Udenyca for transitional pass-through status
Coherus BioSciences announced that the Centers for Medicare and Medicaid Services, or CMS, approved Udenyca biosimilar for transitional pass-through payment status in the hospital outpatient setting. Effective April 1, Udenyca is granted 36 months of transitional pass-through status. “We launched Udenyca with a significantly lower list price, 33% below that of Neulasta. We applaud the Centers for Medicare and Medicaid Services for establishing transitional pass-through status and expanding access to therapies such as Udenyca for the nation’s Medicare patients,” said Denny Lanfear, President and CEO of Coherus.
Canaccord, while disappointed with merger terms, remains buyer of BioScrip
Canaccord Genuity analyst Richard Close lowered his price target for BioScrip to $3.50 from $5.00 while reiterating a Buy rating on the shares. While disappointed with the terms of the Option Care merger agreement as BioScrip shareholders are just 20% shareholders post-transaction, the analyst says he understands the rationale for the merger. The need for scale in healthcare is “increasingly paramount as the provider and payer markets consolidate and reimbursement risk is always present,” Close tells investors in a research note titled “Merger: short-term pain but long-term.” Longer-term scale matters and the transaction provides an improved capital structure, says the analyst. He remains a buyer of BioScrip shares.
Piper pokes holes in Dermira data, says buy Regeneron on selloff
The selloff in shares of Regeneron Pharmaceuticals (REGN) following Dermira’s (DERM) Phase data for Dupixent competitor lebrikizumab is misplaced, Piper Jaffray analyst Christopher Raymond tells investors in a research note. While lebrikizumab appears competitive with Dupixent in atopic dermatitis at first glance, a “number of caveats” translate into a strong potential that Dupixent’s Phase 3 “experience will hold up,” says the analyst. First, he notes, Dupixent appears to have been consistently studied in patients with more severe atopic dermatitis, making cross-trial comparisons “particularly suspect here.” Second, lebrikizumab’s safety data, which is pooled across doses, may not tell the full safety picture of the drug’s most active dose, Raymond contends. Lastly, the analyst reminds investors that lebrikizumab showed similarly positive Phase 2 data in asthma before failing in Phase 3. Given all of this, he thinks “it’s far too early to be writing” Dupixent’s obituary in atopic dermatitis. The analyst keeps an Overweight rating on Regeneron with a $487 price target. The stock in late morning trading is down $5.86 to $408.61.
Sanofi says working on plan to find new CEO, Reuters reports
Sanofi is working on a CEO succession plan in agreement and consultation with current CEO Olivier Brandicourt, Reuters’ Matthias Blamont reports, citing a spokesperson for the drugmaker. Sanofi has an age limit of 65 for its CEO and Brandicourt will be 65 in February 2021, Blamont notes. A Sanofi spokesman commented that “IIt is the responsibility of any company’s board of directors to consider and plan for the succession of its CEO and executive committee members by identifying the next set of future leaders… With this perspective, the board has been considering this succession plan for some time now, in agreement and consultation with our CEO
Mylan Institutional LLC voluntarily recalls Levoleucovorin Injection
Mylan Institutional LLC is conducting a voluntary nationwide recall of two lots of Levoleucovorin Injection, 250 mg/25 mL tothe consumer/user level. The lots were manufactured by Alidac Pharmaceuticals Limited and distributed by Mylan Institutional LLC. The Levoleucovorin Injection is being recalled due to the presence of particulate matter identified as copper salts. The particulate matter was discovered during 12-month stability testing. Administration of a sterile injectable that has foreign particulates has the potential of severe health consequences. Intravenous administration of a solution containing particulates could lead to local irritation, vasculitis/phlebitis, antigenic or allergic reactions, and microvascular obstruction, including pulmonary embolism. To date, Mylan has not received any reports of adverse events related to this recall.
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