Piper Jaffray Reiterates Neutral Rating On Pharmacyclics Following Agreement To Purchase AbbVie

In a research report issued today, Piper Jaffray analyst Joshua Schimmer reiterated a Neutral rating on Pharmacyclics, Inc. (NASDAQ:PCYC) with a price target of $184.00, reflecting a potential downside of 27.8% from last closing price. This comes after AbbVie Inc (NYSE:ABBV) announced an agreement to acquire PCYC for $218 billion.

Schimmer admits that he sees the “strategic value” in the acquisition, because “ABBV [will be] able to steer development of [its] assets in a way to optimize their positioning and prevent others from leveraging Imbruvica in various competitive combinations to crowd out ABT-199.” However, Schimmer continued to note that the price of the acquisition, “relative to ABBV’s current ~$100B market cap makes one wonder why it felt a need to pay so much.”

He concluded, “The ABBV offer may finally support our view that a Neutral rating on PCYC is appropriate (unless a higher bidder emerges, of course).”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joshua Schimmer has a total average return of 19.1% and a 74.6% success rate. Schimmer has a -28.9% average return when recommending PCYC, and is ranked #175 out of 3505 analysts.

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