UPDATE: Jefferies Initiates Cempra with a Buy on New Antibiotic Candidates

In a report published Friday morning, Jefferies analyst Eun Yang initiated coverage on Cempra CEMP with a Buy rating and a price target of $10.00 following two antibiotic candidates targeting multi-drug resistance.

In the report, Jefferies stated, "In 10/12, JEF served as co placement agent for CEMP's private placement (~$23M in net proceeds at $6.50/sh). As a pure antibiotic company with two products targeting fast-rising drug resistant infections, CEMP benefits from recently enacted GAIN Act (e.g., fast FDA approval, additional 5-year market exclusivity). Its lead drug solithromycin (new macrolide) is the key value driver, in Ph3 for community acquired bacterial pneumonia (CABP); second product Taksta in Ph2 for chronic prosthetic joint infection (PJIs). CEMP's limited capital has impacted its ability to conduct Ph3 trials in an expedited manner; and it would need to secure additional financing (via dilutive or non-dilutive) to further advance its Ph3 programs."

Cempra closed on Thursday at $6.71.