Durata To Be Acquired by Actavis; We View The Cash Bid As Reasonable, Says Roth Capital


In a research report issued yesterday, Roth Capital analyst Ed Arce maintained a Buy rating on Durata Therapeutics (NASDAQ:DRTX) and reduced his price target to $23 (from $26), to reflect the announced cash acquisition price Actavis (NYSE:ACT) intends to pay to acquire Durata.

Arce said, “We view the cash bid as reasonable, if perhaps a bit light, given Dalvance’s LT potential across multiple indications. Nevertheless, we do not expect another suitor to emerge.” The analyst continued, “We are lowering our DRTX price target to reflect the cash consideration from ACT. With a signed definitive agreement in place, we see little likelihood of a competing bid given the 72.9% premium to Friday’s close, and the dearth of large strategic buyers with complementary infectious disease (ID) assets (ACT markets Teflaro and is developing ceftazidine-avibactam). The highest near-term risk to our price target is if the acquisition by Actavis fails to be consummated, for whatever reason.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ed Arce has a total average return of 22.5% and a 45.5% success rate. Arce has a 55.9% average return when recommending DRTX, and is ranked #221 out of 3318 analysts.

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