UPDATE: Stifel Nicolaus Cuts PT to $7 on Zogenix

Stifel Nicolaus reduces its price target $1 to $7 on Buy-rated Zogenix

following the company's Q4 release. Stifel Nicolaus says, "Zogenix reported 4Q11 revenues of $7.9mn (Consensus $10.0mn), meaningfully missing top-line expectations primarily from a revision to product returns as well as higher product discounts and rebates. Sumavel prescription volumes improved to 21,000 (from 18,600 in 3Q11) based on market growth rather than share pick up (steady at 0.7% as of February). 4Q11 EPS loss was ($0.36) (Stifel ($0.41), Consensus ($0.34)), mainly due to lower top line, gross margins (impacted by excess capacity charges), offset by lower SG&A expense." ZGNX closed at $2.49 a share yesterday.