Summer Street Sees Nearly 500% Upside in Avanir Pharmaceuticals (AVNR)
Also nice call from Summer Street on MAKO today!
This Analyst Sees Nearly 500% Upside in Avanir Pharmaceuticals (AVNR)
December 15, 2011 2:47 PM EST
Shares of Avanir Pharmaceuticals (NASDAQ: AVNR) are down 16 percent since reporting fourth quarter numbers after the close on Monday, but according to one analyst shares should be higher... much higher.
In a note dated 12/13, Summer Street lifted its price target on the maker of Nuedexta from $10 to $11 while reiterating their Buy rating.
The firm noted 10,210 prescriptions were written for Nuedexta during the fourth quarter, a 99% increase over the third quarter. The treatment for pseudobulbar affect (PBA) and neuropathic pain (NP) is growing at a strong 3-4% week-over-week average pace in the fiscal first quarter of 2012. They see roughly 4,800 prescriptions in November. This would be up from 4,100 in October and just 2,746 in July.
The firm estimates that an annualized 1,200 total weekly prescriptions would cover the fixed expenses of the company's specialty retail and institutional care sales force.
The company also continues to work with payers to ensure reimbursement. "Beginning January 1, 2012, AVNR has agreements with three of the top five payers that manage prescription plans," the firm notes. The company expects 35% of patients will have unrestricted access to Nuedexta.
In the EU, Avanir's Marketing Authorization Application (MAA) filing was accepted on November 17 and decision is expected in June 2012 at the earliest.
The firm's $11 price target is based on a 25x multiple of their FY:15 EPS of $0.77/share discounted at 20%.
With shares of Avanir trading at $1.90 per share, the $11 price target represents 480% upside.