Cardiome May See More Upside When IV Formulation Is Clarified - RBC

Cardiome Pharma Corp. (CRME) shares were still on the rise Monday following last week's announcement of a significant licensing agreement with Merck & Co Inc. (MRK). But according to RBC Capital Markets analyst Douglas Miehm, the response from shareholders may turn even more positive once better clarity is received regarding the IV application of Cardiome's atrial fibrillation drug, vernakalent.

Since Thursday, when Cardiome and Merck announced their long-awaited vernakalent partnership, Cardiome stock has climbed more that 27%. While not too shabby a return over just two trading days, Mr. Miehm says the gains were likely capped because investors remain uncertain about the Food and Drug Administration's stance on the IV formulation of vernakalent.

"The Merck deal was a strong one for Cardiome and while it took longer than originally envisioned, the result was certainly worth the wait," the analyst wrote.

"Unfortunately the strength of the investor response was likely muted by the lack of near term iv visibility. We believe that once greater clarity is provided on the iv formulation, the shares could climb further."

In the interim, he maintained his "sector perform" rating and left his C$11.50 price target unchanged.