Cantor Fitzgerald upgraded Cubist Pharmaceuticals (NASDAQ: CBST) from Sell to Hold. Yesterday Cubist received positive news on the legal front, with a positive outcome for Hispira. Analyst Irina Rivkind said he isn't changing his thesis, but instead opted to take a longer term view.
"We still believe that Cubicin will get eroded over time by new antibiotic entrants but acknowledge that the fall-off in revenues post-generic entry may not be as dramatic as for most other generics. With our re-analysis, we no longer view the stock as overvalued but still prefer to look for more attractive entry points," said Rivkind.
If CBST was willing to pay a billion for OPTR, why wouldn't they pay at least that for TSRX which has much greater potential? The runup in CBST's shares only helps the cause. They could probably get a deal done for $10 in cash (around $400m) and the balance in stock. If a buyout is going to happen, one would think it would take place before the NDA is filed in Sept or Oct.