Analysts are weighing in today on biotech company MannKind Corporation (NASDAQ:MNKD) and NY-based drug company Synergy Pharmaceuticals Inc (NASDAQ:SGYP). Here’s a quick roundup of today’s brokerage notes on MNKD and SGYP.
MannKind announced today the pricing of previously announced private placement of its common shares to selected index funds in Israel. Over 13 million shares were priced at $2.61, equivalent to gross proceeds of $36.2 million, which is well below the original target of 50 million shares. MannKind shares reacted to the news, rising 18.92% to $2.64 on volume of 41.45 million shares, making it among the top winners today.
However, Piper Jaffray analyst Joshua Schimmer believes that this offering falls far short of what MannKind needs for long term solvency as it continues to burn cash and incur debt to Sanofi. The analyst also disappointed that the company is focusing more on creative financial solutions taking advantage of less sophisticated index funds to stave off insolvency as opposed to the traditional value creation routes that the more rigorous US market investors demand.
“While today’s financing may help improve near-term liquidity, long-term solvency remains a major concern. We think the new shareholders may be quite disappointed with their new holdings if Afrezza’s launch continues at its current pace. Our checks with primary care and endocrinology specialists give us little confidence that Afrezza launch will improve significantly any time soon,” the analyst noted.
Schimmer reiterated an Underweight rating on MannKind, with a price target of $1.50, which implies a downside of 44% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joshua Schimmer has a total average return of -2.0% and a 41.5% success rate. Schimmer has a 11.8% average return when recommending MNKD, and is ranked #3342 out of 3840 analysts.
Out of the 8 analysts polled by TipRanks, 2 rate MannKind Corporation stock a Buy, 2 rate the stock a Hold and 4 recommend a Sell. With a return potential of 108%, the stock’s consensus target price stands at $5.63.
Synergy Pharmaceuticals Inc
Canaccord analyst Corey Davis was out pounding the table on Synergy Pharmaceuticals, reiterating a Buy rating and a price target of $19, which represents a potential upside of 219% from where the stock is currently trading.
Davis wrote, “We still believe that SGYP is a very saleable asset, with the two most obvious buyers being Valeant and Shire. But with the former somewhat distracted now and the latter buying Dyax and still hoping to acquire Baxalta, there seem to be higher priorities at the moment. We don’t think the recent hire of Troy Hamilton (whom we’ve had the pleasure of meeting and have found extremely impressive) signals it CAN’T get sold, but any prudent company needs to prepare a commercial infrastructure well in advance of launch (CIC in early 2017E).”
Furthermore, “While most investors are not enthused about the prospects for Synergy to launch on its own, we believe the cost would be dramatically lower than the $250M it cost Forest/Ironwood to launch Linzess. Forest has already re-educated the market that these agents are safe and done most of the heavy lifting.”
According to TipRanks.com, analyst Corey Davis has a total average return of 14.3% and a 50% success rate. Davis has a -2.6% average return when recommending SGYP, and is ranked #225 out of 3840 analysts.
All the 5 analysts polled by TipRanks rate Synergy Pharmaceuticals stock a Buy. With a return potential of 168.5%, the stock’s consensus target price stands at $16.