UPDATE: Bank of America Upgrades The Medicines Company on Leverage

In a report published on Thursday, Bank of America analyst Steve Byrne upgraded The Medicines Company MDCO from Neutral to Buy and raised the price target on the company from $36 to $40. In the report, Bank of America stated, "MDCO has significantly expanded its platform of commercial and pipeline products, nearly entirely focused on the hospital setting while continuing to generate cash flow from Angiomax. Our product-specific forecasts are generally more conservative than peak estimates from MDCO, but we see opportunities to leverage MDCO's sales force to drive revenue synergies while helping hospitals avoid CMS reimbursement cuts (see next page). Our DCF-derived PO of $40 represents a 14x multiple of our 2014 cash EPS est., vs. median levels of 28x for biotech and 14x for spec pharma). We assume dilution from options creep but see little risk of convert dilution." The Medicines Company closed on Wednesday at $30.07.