Cempra Inc (NASDAQ:CEMP) announced that the company has retained Morgan Stanley & Co. LLC as financial advisor to the company and to lead its recently announced process to review strategic business options.
The goal of this process is for Cempra to determine the best use of its significant cash resources and clinical programs to deliver value to patients and shareholders through internal and/or potential external opportunities. As of December 31, 2016, Cempra had cash and equivalents of $231.6 million.
The company has not set a timetable for this process. No decision has been made as to whether the company will engage in a transaction or transactions and there can be no assurance that the review of strategic business options will result in any transaction, or the terms or timing of any potential transaction. The company does not intend to discuss or disclose further developments during this process unless and until its board of directors has approved a specific action or otherwise determined that further disclosure is appropriate.
Shares of Cempra are currently trading at $3.72, up $0.12 or 3.47%. CEMP has a 1-year high of $26.95 and a 1-year low of $2.55. The stock’s 50-day moving average is $3.30 and its 200-day moving average is $11.21.
On the ratings front, Cempra has been the subject of a number of recent research reports. In a report issued on March 1, Janney analyst Debjit Chattopadhyay maintained a Hold rating on CEMP, with a price target of $5.00, which implies an upside of 39% from current levels. Separately, on the same day, Needham’s Alan Carr reiterated a Hold rating on the stock.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Debjit Chattopadhyay and Alan Carr have a yearly average loss of -1.6% and a return of 11.2% respectively. Chattopadhyay has a success rate of 44% and is ranked #3728 out of 4517 analysts, while Carr has a success rate of 49% and is ranked #313.
Overall, 2 research analysts have rated the stock with a Sell rating, 9 research analysts have assigned a Hold rating and 2 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $2.25 which is -37.5% under where the stock closed last Friday.
Cempra, Inc. engages as a clinical-stage pharmaceutical company, which focuses on the development of antibacterials to meet critical medical needs. Its products include; Solithromycin and Taksta.