UBS Downgrades Depomed Inc (DEPO)

UBS analyst Ami Fadia has downgraded DepoMed Inc (NASDAQ:DEPO) from Buy to Hold. The analyst sees risk in management’s 2016 sales guidance of $490-520 million as the base business of the company has underperformed her prior expectations. Full year 2016 consensus sales guidance rested at $495 million.

The analyst also sees no more significant upside to the company’s consensus sales number in the next 2 to 3 years. Though the analyst concedes that prescriptions of the company’s Nucynta ER have remained healthy and also believes that the company could see upwards of $400 million in sales by 2018, this number still undercuts consensus sales expectations of $434 million.

The company is currently experiencing patent litigation over its drug, Nucynta, and resolution of the matter is expected no later than the end of September. The company is pushing for a board meeting in October, where it will provide its investors the information they need to make investment decisions regarding the company.

According to TipRanks, Ami Fadia is a highly ranked analyst, with an average return of 33.1%% and a success rate of 78%.

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