U.S. Pharma: Latest Analyst Actions

by: Alacra Pulse Check Blog
By Sheena Lee

Many US-based Pharmaceutical firms are facing patent expiration worries, and continue to be pressured to produce potentially “blockbuster” pipeline drugs.

Amid a fiercely competitive healthcare market, analyst rating downgrades on companies in the healthcare sector easily outnumbered upgrades over the last month, according to a search of Alacra Pulse. There were 9 reported downgrades and 3 upgrades during the last 30 days.

Seattle Genetics (NASDAQ:SGEN) saw several changes after its stock price rose from $12 to around $16 over the last month. The cancer drug specialist was upgraded by Leerink Swann to Outperform and initiated at Outperform by Piper Jaffrey. But it was downgraded by JP Morgan to Neutral from Overweight and to Sell from Hold by Breann Muray. Canaccord Genuity initiated coverage with a sell rating and $10 target. Some analysts believe the prospects for the company’s B-Vedotin lymphoma drug currently in trials are already reflected in the stock price and that the market for the drug is not that large.

Incyte (NASDAQ:INCY) was downgraded as well to Market perform from Outperform by Leerink Swann analysts as its $16 price approached the target valuation. But Breann Murray initiated coverage this week with a Buy rating and $22 target, while Jefferies reiterated a Buy rating and a $25 target for the bone marrow cancer drug producer.

Connecticut-based Biodel (BIOD) was downgraded by JP Morgan to Neutral from Overweight. Ladenburg Thalmann analysts also downgraded the firm to Neutral from Buy after the FDA rejected its drug Linjeta as an injection for the treatment of type 1 and type 2 diabetes to improve glycemic control.

California-based Cadence Pharmaceuticals (CADX) was downgraded by Ladenburg Thalmann & Co. analysts to Sell from Neutral.The company’s stock price has fallen from over $9 to around $7.50 since the FDA approved Ofirmev, an intravenous formulation of the pain reliever acetaminophen that Cadence plans to sell to U.S. hospitals, as the approval had already been factored in.

California-based biotech firm Biomarin (NASDAQ:BMRN) was pushed down a notch by Morgan Joseph to Hold from Buy and UBS also lowered the stock to Neutral from Buy. Morgan Joseph suggested taking profits after recent gains.

Lazard Capital Markets downgraded NeurogesX (NASDAQ:NGSX), a firm focused on developing and commercializing novel pain management therapies, to Hold from Buy.

Lifepoint Hospitals (NASDAQ:LPNT), a holding company with subsidiaries which own and operate hospitals and healthcare facilities in several states, was downgraded by Credit Suisse to Underperform from Neutral.

Metabolix (MBLX) was downgraded to Underweight from Neutral by Piper Jaffray analysts after lackluster quarterly results, but Cantor Fizgerald raised its price target to $24 from 20 and restated a Buy rating.

On the positive side, drug giant Pfizer (NYSE:PFE) was upgraded by Sanford C. Bernstein to Outperform from Market perform, while UBS maintained its Buy rating and $21 target after the company’s tasocitinib injection showed promise in curbing rheumatoid arthritis.

Gilead Sciences (NASDAQ:GILD) was raised by RBC Capital Markets to Outperform from Sector perform, while both Goldman Sachs and UBS initiated coverage with a Buy rating and $38 target on the back of strong quarterly earnings.

(Source: Alacra Pulse, StreetInsider, TheStreet.com, Minyanville, Bloomberg.)