Cowen on Shire: 'Add Aggressively'

Cowen commented on Shire PLC (ADR) SHPG Tuesday and maintained an Outperform rating and $285 price target.

Analysts led by Ken Cacciatore continued "to believe there is a substantial under-appreciation for the likely significant revenue and earnings growth inflection for Shire set to occur in 2016-20."

Cacciatore felt that the company's growth would be "driven by the introduction of potentially long-duration, durable assets."

The earnings growth expectations excluded "the potential for additional value creating capital deployment from Shire's completely under-leveraged balance sheet," according to Cacciatore.

A major point in the analyst note was the belief that "Shire will seek to narrow the targeted patient population for Natpara in discussions with payors," however, it was felt that "Shire could seek to reach pricing levels in excess of $100,000."

Cacciatore concluded that "the trade-off of a more narrowed, severe patient population – while securing higher pricing – should more easily enable this potential opportunity to reach $1 billion, if not exceed it."

Other positive developments included the company's recent new drug application for Lifitegrast, which is a dry eye treatment, and the company's launch of Vyvanse for Binge Eating Disorder "which could surprise many given its potential patient demographics," Cacciatore noted.

Cacciatore recommended that investors "add aggressively here," however, if the new products in the pipeline were not successfully launched there "could be negative implications" for the stock.

Shire PLC (ADR) recently traded at $237.93, down 0.09 percent.