Piper Jaffray downgrades Trius Therapeutics on the back of its Acquisition by Cubist

|By:, SA News Editor

Piper Jaffray weighs in on Trius Therapeutics (TSRX +16.6%), cutting the shares to Neutral from Overwieght on the back of the acquisition announcement from Cubist (CBST).

Cubist (CBST) will pay $13.50 in cash plus one non-tradeable $2.00 contingent value right for TSRX.

Under the terms of the deal, TSRX shareholders will receive $1 if net tedizolid sales in the U.S., Canada and Europe reach $125M in 2016 and up to another $1 paid on a pro rata basis for the next $10M in 2016 net sales up to $135M.

Piper forecasts 2016 tedizolid sales of $188M, so its sees a good chance that the full $2 CVR will be paid out.

That being said, after applying an 18% discount rate back through today, Piper arrives at present CVR value of $1.32, leaving the stock near fair value.