UPDATE: Aegis Capital Upgrades Cubist Pharmaceuticals Following Trius/Optimer Acquisitions Announcement
In a report published Friday, Aegis Capital analyst Raghuram Selvaraju upgraded Cubist Pharmaceuticals (NASDAQ: CBST) from Hold to Buy, and named a $70.00 price target.
In the report, Aegis Capital noted, “Earlier this week, Cubist announced that it would be buying two other antibiotics developers, Trius Therapeutics (TSRX/NASDAQ, Hold) and Optimer Pharmaceuticals (OPTR/NASDAQ, Not Rated). Cubist is paying an initial $707mm in cash for Trius, with an additional $111mm in contingent value rights (CVRs) - approximately $2.00 per share more - payable in the event that Trius's lead drug candidate, tedizolid phosphate, generates over $135mm in sales in 2016. For Optimer, Cubist is paying an initial $535mm in cash, with additional CVRs amounting to $266mm payable if Optimer's main marketed product, fidaxomicin, generates over $300mm in cumulative net sales between end-July 2013 and end-2015. Following this double-whammy acquisition spree, we are upgrading Cubist from a Hold to a Buy rating. Concomitantly, we are instituting a $70.00 12-month price target on Cubist shares.”
Cubist Pharmaceuticals closed on Thursday at $64.80.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.