Wedbush Reiterates Outperform Rating, $8 PT on Avanir Pharmaceuticals on Buying Opportunity Created by Short Report

In a report published Thursday, Wedbush analyst Gregory R. Wade reiterated an Outperform rating and $8.00 price target on Avanir Pharmaceuticals AVNR. In the report, Wedbush noted, “Yesterday, Avanir's stock was the subject of a short report that alleged systemic off-label marketing for NUEDEXTA and predicted defeat in the Paragraph IV litigation. We believe the author's choice to publish this report betrays his/her conviction level since, as it transiently lowers AVNR's stock price, it would be anticipated (if others follow the report's advice) to increase the costs associated with borrowing the stock to maintain short positions. Considering that the Paragraph IV challenge outcome is likely by YE:13, we can only conclude that the report itself was created to drive AVNR's shares down for the express purpose of the author's profiting from an already established short position. We have discussed this allegation with AVNR's CEO Keith Katkin and he has assured us that there is a culture of compliance at the company, and that any allegations of inappropriate behavior are followed up internally. The basis of the author's concern that AVNR is engaging in off-label marketing is derived from an un-referenced belief that there are fewer PBA patients that AVNR has represented in their corporate communications, the disproportionately high level of sales from the institutional setting, and purported quotes from unnamed former AVNR sales people alleging off-label marketing practices.” Avanir Pharmaceuticals closed on Wednesday at $4.79.