UPDATE: Piper Jaffray Initiates Overweight, $13 PT on Derma Sciences
Piper Jaffray initiates an Overweight rating with a price target of $13 on Derma Sciences (NASDAQ: DSCI) as it sees the company as an emerging player in the rapidly expanding would care space.
Piper Jaffray says, "With significant growth from DSCI's higher-margin offering of dressings for managing complicated wounds such as diabetic foot ulcers (DFU) and venous leg ulcers (VLU), we believe DSCI is positioned for sustainable cash flow generation from its base wound care business. Further, the potential for transformative value creation is meaningful in our view with pharmacologic product DSC127 set to enter Phase III for DFU's later in 2012. With a market cap of only $115M, emerging profitability from the base business, and a promising Phase III-ready shot-on-goal (cash from operations of around $5M by 2014 growing to $30M in 2016 with the start of DSC127 contribution), DSCI shares offer an attractive risk/reward in our view."
DSCI closed at $8.97 on Thursday.
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