UPDATE: Piper Jaffray Initiates Orexigen at Overweight on Valuation, Outlook

Piper Jaffray initiated coverage on Orexigen OREX with an Overweight rating and a $10 price target. Piper Jaffray commented, "We believe shares are overly discounted vs. peers due to the delayed approval of lead drug Contrave (3rd to market). In our view, Contrave's differentiated profile should position it well in what we anticipate to be a robust U.S. obesity Rx market, resulting in part from competitors' efforts with awareness and reimbursement. We see Contrave's efficacy in a broad set of patients, its likely “clean” label and scheduling, satisfactory patient experience with buproprion, and PCP-experienced partner (Takeda) as establishing competitive advantage and driving it to be a $0.5-$1.0B obesity drug and a shareholder “win.”" Orexigen closed at $5.76 on Thursday.