Brean Capital Reiterates Buy After Zogenix, Inc. Sells Painkiller


In a research report issued on March 11, Brean Capital analyst Difei Yang reiterated a Buy rating on Zogenix, Inc. (NASDAQ:ZGNX) with a price target of $2.50. The rating comes after the pharmaceutical company announced the sale of Zohydro ER, a painkiller, and released a Q4 report in-line with expectations.

Yang applauded the sale because it will allow Zogenix to simplify their operations, reduce their “cash burn,” and refocus on research and development. He noted that Zohydro ER’s price is “reasonable… given the profile and history of the product.” Zohydro was sold for $100 million “in upfront consideration,” but Yang believes the painkiller will reach $75 million in revenue in 2016 or 2017.

Aside from the sale of Zohydro, Yang is optimistic about Zogenix’s orphan drug currently in development. Yang expects ZX008, used to treat Dravet syndrone, to earn “top-line results by H2 2016” and noted that ZX008 already posted impressive results from a previous open label study. He added, “If ZX008 eventually leads to approval, we believe it is a commercial launch that Zogenix can successfully handle.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Difei Yang has a total average return of 11.1% and a 62.1% success rate. Yang has a 28.0% average return when recommending ZGNX, and is ranked #859 out of 3511 analysts.

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