Healthcare analysts were out with research notes on pain drug maker Depomed Inc (NASDAQ:DEPO) and biopharmaceutical giant Celgene Corporation (NASDAQ:CELG). While activist investment firm Starboard Value disclosed a 9.8 percent stake in Depomed, Celgene is preparing to release first-quarter earnings on April 28. Let’s illuminate recent analyst insights on the two biotech names.
Today, shareholders of Depomed woke up to a nice 15% pop in the value of their shares, after hedge fund Starboard Value disclosed a 9.8% stake in the company. In reaction, Mizuho’s top analyst Irina Rivkind Koffler has put her Neutral rating and $14 price target under review.
Koffler observed, “We think that this situation is complex and could take some time to play out. There are a couple of big unknowns in this situation: 1) the outcome of the Nucynta generic litigation, which is critical for a potential buyer to value Depomed; and 2) the mindset of Horizon shareholders who may prefer for the company to pursue additional Orphan drugs, rather than primary care opioid pain medications. At the same time, we think DEPO shareholders are nervous about 2016 guidance and could be willing sellers to lock in any gains in today’s market.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Irina Rivkind Koffler has a yearly average return of 28.8% and a 57% success rate. Koffler has a average return when recommending DEPO, and is ranked #10 out of 3780 analysts.
Out of the 10 analysts polled by TipRanks, 8 rate Depomed stock a Buy, while 2 rate the stock a Hold. With a return potential of 47%, the stock’s consensus target price stands at $25.
In a research report issued yesterday, Jefferies analyst Brian Abrahams took the opportunity to provide some thoughts on Celgene, as the company will be reporting first-quarter 2016 results on April 28, before the opening bell.
Abrahams noted, “First quarter is seasonally soft for Revlimid, and while we don’t expect anything different for 1Q16, realistic expectations should enable an overall in-line quarter (our $1.26 EPS vs. $1.28). Otezla scripts slowing is a bit disappointing, increasing the dependence on ex-U.S. uptake and additional indications for continued major sales growth. Formalization of 2017 guidance, possibly on the 1Q earnings call (our $6.61 2017 EPS vs. $7.21 consensus), balancing strong MM franchise trends against FX headwinds and softening Abraxane/Otezla should reduce uncertainty/confusion, as Street looks for catalysts to help expand the multiple to levels more commensurate with the company’s growth potential (could see increasing focus on near-term pipeline events — Otezla ph.II atopic dermatitis data, possible GED-0301 endoscopy data this year?).”
The analyst rates Celgene’s stock a Buy with a price target of $146, which represents a potential upside of 37% from where the stock is currently trading.
According to TipRanks.com, analyst Brian Abrahams has a yearly average return of 15.2% and a 63% success rate. Abrahams has a 13.2% average return when recommending CELG, and is ranked #177 out of 3780 analysts.Out of 22 analysts polled by TipRanks, 19 are bullish on Celgene’s stock, while 3 are neutral. With a return potential of 39%, the stock’s consensus target price stands at $148.13.