"For A Good Laugh" Read Jefferies' December 13, 2011, comments:
Jefferies is maintaining its Hold rating on shares of Avanir Pharmaceuticals (NASDAQ: AVNR), but is lowering its price target from $3.50 to $3.00 following the release of its FY11 results.
The firm highlights weekly Nuedexta sales from 2/18 to 12/2 rose less than roughly 30 new patients per week while remaining robust linear. With management's run rate of 1,200+ RX/week, the Jefferies forecasts AVNR will reach breakeven in 2016.
An analyst at Jefferies comments, "While we continue to believe that Nuedexta may become an attractive drug, addressing a large market opportunity for PBA, we note that sales have yet to accelerate. Our current valuation already assumes a long 7 year period of linear growth in sales, so significant upside to the valuation would require an acceleration in uptake. Based on management commentary and physician feedback, we believe that the primary barrier to adoption remains the relatively low priority that physicians place on the diagnosis and management of PBA in patients with complex and debilitating neurological disorders. We expect considerable marketing effort would be required for Nuedexta to ramp to a nonlinear sales trajectory."
They are obviously the big short at $4.40
When 22 million shares are bought to cover their short, the price will
be $5.00 unless they shorted against the box. If so they will just
go away and the manipulation will cease allowing the share price to
reach fair market value.
Jefferies or Piper Jaffray, which comments make more sense? I will go with Jaffray's recent comments:
“We are initiating on Avanir with an Overweight rating and $6 price target. Avanir develops drugs for neurological diseases with one product, Nuedexta, approved for pseudobulbar affect (PBA), marketed by possibly one of the largest institutionalized-patient-focused sales forces in the U.S. Its Nuedexta-derived pipeline should lower capital and clinical-failure risk, in our view. Nuedexta prescriptions are growing well, but poised to accelerate over 1-4 quarters with an increasingly effective institutional force and recently re-targeted retail effort. We believe the market under-appreciates Nuedexta's broad applicability that supports use in settings like MS-pain and Alzheimer's agitation, both in PhII trials that we expect to become increasingly visible on enrollment updates and data, fueling AVNR appreciation in later 2013 to 1H'14.”