UPDATE: Piper Jaffray Downgrades Santarus Following Salix Acquisition Announcement

In a report published Friday, Piper Jaffray analyst David Amsellem downgraded the rating on

from Overweight to Neutral, but raised the price target from $31.00 to $32.00. In the report, Piper Jaffray noted, “This afternoon, Santarus announced it has entered into a definitive agreement to be acquired by Salix for $2.6B in cash (or $32 per share). This is a premium of roughly 38% over SNTS' closing price; this represents a P/E of 19x our 2014 EPS estimate of $1.65 (revised following SNTS' 3Q13 announcement). We believe that SNTS is a logical target for SLXP given that it broadens SLXP's reach in the gastroenterology space (particularly with the addition of Uceris to SLXP's product portfolio). In that sense, we do not envision a higher bid for SNTS emerging given our view that no other acquiror would synergize quite as well with SNTS. As such, we are downgrading SNTS to Neutral from Overweight. We are slightly raising our price target to $32 from $31 to reflect the proposed acquisition price.” Santarus closed on Thursday at $23.22.