- Pozen shares have sold off significantly over the past month on PDUFA delay and Horizon's loss of some formulary coverage for VIMOVO.
- We believe PA will be approved in December 2014 and there will be a meaningful run in the shares ahead of approval.
- Horizon losing formulary coverage for VIMOVO is unfortunate, but the impact to Pozen is minimized by minimum guaranteed payments and an increase in the Ex-U.S. sales royalty rate.
- We believe Pozen is worth $11.50 per share based on DCF. Assuming PA gets approved in December 2014, Pozen should generate over $1.00 in EPS.