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BioScrip rises on positive analyst expectations

WASHINGTON (AP) -- BioScrip Inc. traded higher Tuesday after an analyst issued a "Buy" rating on the company's stock, saying the specialty pharmacy benefit manager is well positioned for growth.

THE SPARK: Jefferies analyst Brian Tanquilut started coverage of the Elmsford, N.Y.-based company with a $17 price target, stating that it has the potential to outperform investors' expectations over the next five years. Specifically, he expects the company to use funds from a recent stock offer to acquire smaller companies in the drug infusion space.

THE BIG PICTURE: BioScrip distributes drugs used to treat chronic conditions including HIV, cancer, and the side effects of organ transplants. In 2012, the company sold its traditional mail order and pharmacy business to focus on in-home health services, including the infusion of drugs.

THE ANALYSIS: Tanquilut noted that BioScrip raised about $120 million in April through the stock sale. While some of that money was used to pay off debt, the analyst says that BioScip "is currently sitting on a sizable cash position that we expect management to deploy fairly quickly."

Tanquilut's firm, Jefferies, acted as book runner for the BioScrip stock offer that wrapped up April 19.

SHARE ACTION: Shares of BioScrip Inc. rose 49 cents, or 3.7 percent, to $13.70 in afternoon trading. It has changed hands between $6.14 and $14.73 in the past 52 weeks, and started the session up more than 27 percent in 2013.