UPDATE: Piper Jaffray Downgrades YM BioSciences to Neutral Post Acquisition

Piper Jaffray reduced its rating on YM BioSciences YMI from Overweight to Neutral and lowered its price target from $3,50 to $2.95. Piper Jaffray noted, "We are downgrading YMI to Neutral following Gilead's announcement to acquire YMI Biosciences for $510mn ($2.95/share) in cash. This transaction supports our thesis that the myelofibrosis market can support multiple players and that CYT387 will have use not only in Jakafi failures but as the preferred therapy in patients with severe anemia, particularly those that are transfusion dependent (~20-30% of MF patients). However, we expect it will take time for Gilead to realize the benefits of the acquisition as Phase III trials will commence in 2H13, vs. prior expectations of early 2013, implying a 1H16 launch." YM BioSciences closed at $2.91 on Tuesday.