UPDATE: Cantor Fitzgerald Downgrades Cubist Pharmaceuticals to Sell on Optimer Deal Unlikeliness
In a report published Wednesday, Cantor Fitzgerald analyst Irina Rivkind downgraded the rating on Cubist Pharmaceuticals (NASDAQ: CBST) from Hold to Sell, but raised the price target from $38.00 to $40.00.
In the report, Rivkind noted, “CBST has traded up in tandem with OPTR after Optimer announced on Feb 27 that it is exploring strategic alternatives. Cubist has been co-promoting Optimer's Dificid antibiotic in hospitals since its launch, and the company has been mentioned in the press as a potential suitor for Optimer. We don't think that Cubist is a likely acquirer of Dificid since (1) it is developing a competitive product for the treatment of C. difficile (Surotomycin) which could enter the market in early 2016; (2) Optimer already partnered EU rights for Dificid with Astellas, and we think that Cubist would prefer to leverage its planned sales force expansion in Europe by selling Surotomycin along with CXA-201; and (3) Cubist management believes that Surotomycin may have some competitive advantages to Dificid, and we think that the company may be able to drive more favorable pricing for its product. Because we don't expect Cubist to acquire Optimer, we think that CBST valuation is not supported by fundamentals, and the stock could sell off if another bidder emerges.”
Cubist Pharmaceuticals closed on Tuesday at $48.79.
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