Piper Jaffray Reiterates Overweight Rating, $55 PT on Cyberonics After Lawsuit Dismissal

In a report published Monday, Piper Jaffray reiterated its Overweight rating and $55.00 price target on Cyberonics

. Piper Jaffray noted, “On Saturday, a filing was entered at the District Court of Massachusetts by the former CYBX employee suing the company for wrongful termination. The filing was a ‘notice of dismissal without prejudice'. No further information was provided in the one page document, but we believe the dismissal pokes holes in the short thesis regarding a ‘whistle-blower lawsuit' against the company. While the dismissal does not guarantee that a separate qui tam lawsuit (under the Federal False Claims Act) has not been filed, we believe this scenario is highly unlikely. Further, the dismissal suggests CYBX had not been engaged in attempting to coerce surgeons to prematurely schedule VNS device replacements for patients receiving the company's VNS therapy. We continue to believe CYBX VNS therapy serves a large, growing, and under-penetrated epilepsy market worldwide, with upside potential for a positive reimbursement decision in depression. We maintain our OW rating and $55 PT.” Cyberonics closed on Friday at $44.35.