BMO Sees Jazz Pharma As 'A Rare Breed In Specialty Pharma'

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BMO initiated coverage of Jazz Pharmaceuticals plc - Ordinary Shares JAZZ on Tuesday, with an Outperform rating and $190 price target, calling the company “a rare breed in specialty pharma.” Their investment theses is based on four key points:

  • 1) Even though specialty pharma has been a laggard recently, the experts believe Jazz has a “unique business model,” as the company targets several rare diseases like narcolepsy or VOD – and this “should result in greater sustainability with higher barriers to entry, as well as greater profitability” and industry leading margins.
  • 2) It seems like the largest overhang on the shares, the potential for a generic version of Xyrem, could vanish soon, as analysts expect the litigation to resolve in favor of Jazz.
  • 3) The pipeline is starting to prove fruitful and, as such, could become an important near-to-medium term catalyst. Among the events expected soon are the U.S. release of Defitelio for VOD, Phase 3 data for JZP-110 in excessive daytime sleepiness by EOY, an LCE update for Xyrem, and a filing of Vyxeos for AML from the pending Celator Pharmaceuticals Inc CPXX agreement.
  • 4) The analysts think Jazz has done well managing it M&A strategy, while maintaining its balance sheet solid, even after the Celator Pharma deal. This provides management with plenty of flexibility to continue to expand its rare disease portfolio.
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Posted In: Analyst ColorBiotechLong IdeasHealth CarePrice TargetInitiationAnalyst RatingsTrading IdeasGeneralBaird
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