Cantor Comments on Flexion Therapeutics Inc (FLXN) In Light of Buyout Rumors
Flexion Therapeutics Inc (NASDAQ:FLXN) shares are on the rise today on the back of rumors that Sanofi (NYSE:SNY) is in talks to acquire FLXN for more than $1 billion in cash.
Cantor analyst Chiara Russo believes that there is strategic rationale for this, given that Sanofi currently markets theSynvisc/Synvisc One franchise and needs new products.
Russo wrote, “Both sides have refused to comment, however we do believe that this acquisition would make sense for Sanofi and is needed, given its past M&A difficulties (Medivation, Actelion) and struggles with the US diabetes franchise. FLXN, however, has been building out its commercial infrastructure and is fully capable of a successful self-launch, in our view. With the significant changes in the competitive landscape over the past year giving Zilretta the sole new voice in the space, we see a mid-30s price asbeing a little low for a strategic buyer. Whether investors see it that way, given thecurrent market uncertainty, will remain to be seen.”
Russo reiterates an Overweight rating on shares of Flexion Therapeutics, with a price target of $34, which represents a potential upside of 28% from where the stock is currently trading.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Chiara Russo has a yearly average return of -1.2% and a 38% success rate. Russo has a 25.7% average return when recommending FLXN, and is ranked #3589 out of 4549 analysts.
All the 7 analysts polled in the past 12 months rate Flexion stock a Buy. With a return potential of 33%, the stock’s consensus target price stands at $35.50.