UPDATE: Bank of America Initiates Omthera Pharmaceuticals with Buy on Multiple Positive Factors

In a report published Tuesday, Bank of America analyst Gregg Gilbert initiated coverage on Omthera Pharmaceuticals OMTH with a Buy rating and $10.00 price objective. In the report, Gilbert noted, “We are initiating coverage of Omthera with a Buy rating and $10 PO. In our view, Omthera represents an attractive vehicle for investing in the omega-3 market given the 1) large size of the market; 2) compelling valuation relative to the only other omega-3 pure play, and 3) potential advantages of Epanova over other omega-3s. We believe Epanova has significant growth potential, but note that the drug does not have to become a blockbuster for there to be meaningful upside for the stock. Key risks are delays or failure of Epanova to get to market, and lower market growth and/or lower share, which could lead to downside to our estimates and PO. We want to be clear that the stock is thinly traded and that we do not expect significant news on approvability until next year.” Omthera Pharmaceuticals closed on Monday at $7.21.
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