Santarus Hits New High On Bullish Initiation Report
By AMY REEVES, INVESTOR'S BUSINESS DAILY
Posted 02:48 PM ET
Shares of specialty drugmaker Santarus (SNTS) rose as much as 9.5% to an all-time high above 24 Monday after JMP Securities initiated coverage with an outperform rating.
John Newman, JMP's senior biotech analyst, told IBD that even though the stock has nearly doubled since the approval of bowel-disease drug Uceris in January, he believes investors are underestimating the potential of Ruconest, which he expects the FDA to approve for hereditary angioedema early next year.
Newman also says Ruconest could eventually be used prophylactically for the condition, which is an immune-system disorder that episodically brings swelling to various parts of the body.
"If that were actually to materialize, then I think you would have an entirely new leg to the story, and I think the stock would move substantially," Newman said.
Newman also likes the fact that, unlike Uceris, Ruconest is a biologic drug, which makes it much more difficult to knock off in generic form. He believes that Santarus is developing a hybrid biotech/pharma model that could strengthen its competitive position.
Newman's price target is 27. The stock was up 7%, near 23.50, in afternoon trading in the stock market Monday.
Santarus is covered by four other analysts, all of whom rate it a buy. The stock, which has more than doubled this year, scores an excellent IBD Composite Rating of 98, and it ranks No. 40 in the latest IBD 50 listing of top stocks.