Top analyst Irina Rivkind Koffler at Mizuho is taking a sharp left from the sidelines on Eagle Pharmaceuticals Inc (NASDAQ:EGRX) on the heels of Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) reigning in expectations on the sales of leukemia and lymphoma-treating drug combination Treanda/Bendeka for the financial year of 2017.

For context, TEVA and Eagle entered into an exclusive licensing agreement in 2015 for the drug, which TEVA now anticipates will bring in $600 to $660 million in sales, below EGRX’s consensus estimates for 2017 Bendeka royalties.

In reaction, Koffler joins a slew of investors running for the hills after shares toppled 13% today. The analyst subsequently provides a new bearish take on the volatile stock, downgrading from a Neutral to an Underperform rating on EGRX while reducing the price target from $78 to $64, which represents a 2% downside from where the shares last closed.

For Koffler, these lowered expectations could prove to be quite significant, as royalties for Bendeka account for approximately 62% of Eagle’s valuation. Therefore, the analyst is concerned that this “more conservative outlook could adversely impact takeout interest.”

FactSet consensus presently calls for a 25% Bendeka royalty of $166 million for 2017. However, Koffler believes that the projections are “too optimistic since Teva’s guidance range also includes Treanda powder sales that account for approximately 10% of unit volumes and are excluded from Eagle’s royalty.”

Furthermore, TEVA management officials indicated to Koffler that annual volume declines of 5 to 6% are expected amid a scope of rising competition.

The analyst anticipates “consensus numbers to come down. Lower Bendeka value may also imply a lower probability of company takeout, in our view, and some of the takeout premium could also come out of the stock.”

Ultimately, Koffler recognizes a steep uphill battle facing EGRX, asserting, “To gain hospital market share, Eagle’s existing and pipeline products would need to show significant improved efficacy or tolerability benefits to warrant their branded price. Bendeka meets this hurdle on safety, but we are less certain whether Eagle has generated sufficiently compelling efficacy or safety data for Ryanodex to drive hospital uptake away from generic dantrolene upon approval, and we think that this question may concern potential acquirers.”

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, top analyst Irina Rivkind Koffler is ranked #71 out of #4348 analysts. Koffler has a success rate of 52% and an annual average return of 20.2%. When recommending EGRX, Koffler earns an impressive average profit of 156.2% on the stock.

TipRanks Analytics exhibit EGRX as a Strong Buy. Out of 4 analysts polled by TipRanks in the last three months, 3 are bullish on EGRX stock and 1 remains sidelined. With an upside potential of 34%, the consensus target price stands at $89.33.