Medicines Company Gets FDA Approval, Has 119% Upside According To This Analyst

The Medicines Company MDCO announced FDA approval for Vabomere injection to treat adult patients with complicated urinary tract infections. The company said the drug will be made available in the fourth quarter of 2017.

Following the announcement, Chardan analyst Gbola Amusa said the Vabomere approval would catalyze material upside for Medicines Company shares.

The firm has a Buy rating and an $85 price target on the stock, suggesting roughly 119 percent upside from current levels.

Notwithstanding the approval, shares of Medicines Company were sliding 5.5 percent to $36.58.

See Also: GlaxoSmithKline Recent Pullback Delivers A Healthy Opportunity To Buy

Vabomere, belonging to a new class of beta-lactamase inhibitors, is the first carbapenem-based combo product approved. Chardan indicated that no AdComm meeting was required for approval. The approval was supported by the results of the 550-patient phase III TANGO-1 study, the firm said.

According to Chardan, Vabomere approval is likely to catalyze a value-enhancing monetization of the infectious disease business. Additionally, the firm said it expects Medicines Company value accretion, as it focuses on divestments to unlock value.