Chardan: Time To Buy The Medicines Co.

• The Medicines Company MDCO reported its third quarter financial results on Tuesday morning, beating estimates on the earnings front but missing on the revenue front.
• Following the earnings call, Chardan analyst Gbola Amusainitiate coverage on the stock with a Buy rating and $50price target.
• Shares of The Medicines Co. were trading down more than 1 percent on Wednesday morning.

In a report issued Wednesday, Chardan analyst Gbola Amusa explained that his Buy rating was based on The Medicines Co.’s leverage to one of Chardan’s “long-time favorite spaces in therapeutics, anti-PCSK9 lipid management.”

According to the report, the firm considers The Medicines Co. to be a leading name in a segment of therapeutics that is likely to generate excess returns in the next 5 to 10 years to come. The analysts recently appreciated the company as

"a more compelling investment” than Esperion Therapeutics Inc ESPR and as “a potentially disruptive player in the high-potential anti-PCSK9 lipid management market,” which the firm estimates should reach $38.3 billion in yearly sales by 2025.

Recent data provides further evidence of the potential for a paradigm change on the back of the anti-PCSK9 market. However, The Medicines Co.’s stock has only surged about 16 percent since the data was out. And, with new data due on the week of November 11, Chardan thinks this is a good time to act on the stock.

In addition to the upcoming catalyst, the experts note “another potential lever for performance, as: investors are increasingly calling for a breakup or sale of MDCO to unlock shareholder value, and management is increasingly focused on restructuring to unlock value.”

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.