Benzinga's Downgrade Summary for June 25, 2012
Listed below are today's Top Downgrades covered by Benzinga:
BMO Capital went on to say “With ARNA shares trading at our target price we believe the stock is fully valued and pricing in timely approval, absence of REMS and low burden of monitoring. Upside potential to our $1.6B global peak sales estimate in 2020 and to our 2017 US sales estimate of $550M is difficult to ascertain, in advance of approval, labeling review and early-market trends, but we would highlight incremental $0.14 EPS for every $100M in incremental sales in our 2017 valuation year. Downside risk to nonapproval is low, in our opinion; however, with 17 of 23 panel members recommending regular monitoring for valvulopathy and with 9 of 23 specifically recommending a REMS or regular ECHO monitoring, downside risk to estimates could emerge.”
Wells Fargo comments, "On 6/22, CHMP announced that they were not recommending approval of Elelyso in Europe despite its favorable clinical benefit, due to Shire's Orphan exclusivity status for Vpriv in that region. This was a known risk, but we had believed that CHMP would make an exception to this technicality given the recent Gaucher enzyme supply issues. Europe is a significant potential market for Elelyso, with nearly 40% of our out-year estimated revenue expected from this region. While this rejection is a non-final decision and the European Commission (EC) could still decide to approve Elelyso, we do not believe this is highly likely, and as such have lowered our probability of European approval to 30%."
Morgan Stanley comments, "The next 9 months likely see rapidly deteriorating fundamentals on the one hand offset by stories of potential strategic options on the other, following the announcement last month that RIMM hired JPM and RBC to assist in a strategic review of its business, leaving the stock pushed and pulled strongly in both directions. In this volatile situation, we downgrade to UW as after all the inevitable ups and downs, we believe the long-term value of the business is below the current stock price."
All of Benzinga's Downgrade coverage can be viewed here.
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