UPDATE: Oppenheimer Lowering Price Target on Zalicus

Oppenheimer & Co. is out with a research report on Zalicus Inc. ZLCS and is lowering its price target to $3 from $4, but is keeping its Overweight rating on shares. In a note to clients, Oppenheimer & Co. writes, "We are providing an update on our view of Zalicus following a call with management. Our interest in Zalicus was based on the opportunity for Synavive, a modified steroid with potentially large commercial opportunity. The Synavive story has not changed in the last several months, and the company continues to accrue rheumatoid arthritis patients in the Phase IIb clinical study. However, the royalties for Exalgo have been below investors' expectations, which we believe is one of the contributors to the weakness in the stock (in addition to macro factors). We did not explicitly factor in Exalgo royalties in our valuation, but given the weakness, we removed several companies with product sales/royalties from our comparables list, reducing our price target from $4 to $3/share." Shares of ZLCS closed at $1.10 yesterday.