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In a report published Tuesday, Stifel analyst Annabel Samimy upgraded the rating on
ZogenixZGNX from Hold to Buy, and named a $5.00 price target.
In the report, Stifel noted, “Following Zohydro's approval Friday, Zogenix updated its commercialization/partnership plans going forward. Though there are several moving parts with regard to strategy, Zogenix remains prepared to move forward independently and any partnership going forward would be with strict intent of enhancing value. Thus, as a base we assume that Zogenix will work to build its sales force to ~150 reps, financed with the remainder of its ATM of $22.7mn. Within weeks, we should gain clarity on the certainty of a partnership, which we view as an upside scenario as it should come with upfront fees (non-dilutive financing), some shared expense, and payment to partner based on sales levels in its designated territory. As a base, though, we assume a ‘go-it-alone' strategy, which yields a value of up to ~$5, assuming on a non-probability weighted sales outlook of $185mn. We upgrade to Buy as momentum builds into possible partnership.”
Zogenix closed on Monday at $2.89.
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