Canaccord Genuity's Dewey Steadman maintains a Buy rating on Cardiome's stock with an unchanged $5 price target.
Cardiome's sale of its Canadian business includes on-market Brinavess and Aggrastat and is complemented by the Xydalba and Trevyent pipeline projects, Steadman said in a Tuesday note. (See the analyst's track record here.)
Cardiome will form a new company named Correvio and will net the $19 million in cash, which would boost its estimated cash balance to around $40 million, the analyst said. The cash on hand should prove to be sufficient to finance the pharma company's operations through at least 2019, if not longer, he said.
The divestiture is also an "attractive way" for Cardiome to finance its near-term business development without "sacrificing much upside," given the company's approximately $77,000 in revenue in 2017, the analyst said.
In return, Cipher likely accepted the transaction as it includes Cardiome's roughly $232.5 million in Canadian tax losses that Cardiome would never fully utilize itself.
Cardiome's deal is viewed favorably within the "often-overlooked" specialty pharmaceutical market outside of the U.S, Steadman said.
Shares of Cardiome Pharma were up 3.35 percent at the close Wednesday.
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Latest Ratings for CRME
|Nov 2017||Canaccord Genuity||Maintains||Buy|
|Jul 2017||Canaccord Genuity||Assumes||Buy|
|Dec 2016||Leerink Swann||Initiates Coverage On||Outperform|
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