UPDATE: Bank of America Upgrades Questcor Pharmaceuticals to Buy on Acthar Outlook
In a report published Wednesday, Bank of America analyst Steve Byrne upgraded the rating on Questcor Pharmaceuticals (NASDAQ: QCOR) from Neutral to Buy, and raised the price target from $58.00 to $80.00.
In the report, Bank of America noted, “Following QCOR's success in driving Acthar sales in recently promoted indications and its investment in R&D for new indications, we now assume a longer growth period for Acthar sales. We model steady revenue growth for ten years with peak sales of $2.4bn in 2023 (prev. $1.5bn in 2018; see Charts 2&3). While we have cautiously flattened our revenue forecasts for the MS indication, we look for sustained momentum in the rheumatology and nephrology launches. An expansion into pulmonology is targeted for Q4, and we anticipate dermatology and/or ophthalmology could follow. Sustained reimbursement and yearly price increases further bolster our longer-term view. Our DCF-derived PO represents a 13.6x multiple of our 2014 GAAP P/E, slightly below the 15.7x median for spec pharma co's. Our EPS estimates through 2015 remain above consensus.”
Questcor Pharmaceuticals closed on Tuesday at $64.95.
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