Brean Capital’s healthcare analyst Difei Yang weighed in this morning with a few insights on Zogenix (NASDAQ:ZGNX), after the healthcare research firm Symphony Health Solutions reported that the company’s Zohydro ER achieved an estimated 19,000 prescriptions during Q4 2014. The analyst rates the stock a Buy with a $2.50 price target.
Yang observed, “We believe the current consensus has overlooked portions of two one-time payments from partners: 1) a payment of $3.5 million from Teva for referencing certain carcinogenicity data generated by Zogenix for hydrocodone bitrate for use in connection with Teva’s NDA for its extended-release hydrocodone product candidate; and 2) a payment of $5 million from Purdue to waive market exclusivity for Zohydro ER in support of Purdue’s Hysingla product. These two deals clearly support our thesis that Zogenix has a competent R&D and regulatory team which could help the company to continue delivering upside surprises while Zohydro ER faced challenges on a commercial front during 2014.”
The analyst continued, “The current Q4 consensus revenue looks light to us and thus gives the company an opportunity to outperform. There could also be EPS upside as a result of outperformance on revenue. We have revised our 4Q revenue estimate from $15.3 million to $17.7 million and our EPS forecast from ($0.12) to ($0.10). Current consensus is at $12.3 million on revenue and EPS of ($0.11). In our view, the importance of revenue upside is more important to Zogenix than EPS at the current stage.”
Zogenix, Inc., a pharmaceutical company, develops and commercializes therapies for the treatment of central nervous system disorders and pain.