Roth Capital Affirms Buy On Sucampo On Reducing Amitiza Supply Costs


Sucampo Pharmaceuticals (NASDAQ:SCMP) has signed a 10-year agreement with supplier R-Tech Ueno for lower prices of Amitiza across all unpartnered regions globally. The company expects the deal will facilitate expansion where greater pricing flexibility allows access into key regions with tighter reimbursement restrictions like Europe and emerging markets.

In a research note issued today to clients, Roth Capital analyst Ed Arce affirmed a Buy rating on SCMP with a $9.00 price target, following the supply agreement. Arce noted, “We view this as an important step competitively as Sucampo will seek a European commercial partner following broad EU approval of Amitiza anticipated in 1Q15.” The analyst continued, “This deal’s lower prices will become effective in the U.S. upon the expiration of the collaboration and license agreement with Takeda in December 31, 2020. We note that lower Amitiza costs in Japan will likewise become effective upon the expiry of its manufacturing and supply agreement.”

In closing, the analyst wrote, “We continue to view SCMP shares as undervalued as new CEO Peter Greenleaf begins to take concrete steps to realize the inherent value in Amitiza and the greater platform.”

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 23.8% and a 45.8% success rate. Arce has a -10.5% average return when recommending SCMP, and is ranked #311 out of 3257 analysts.

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