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Wedbush Initiates Coverage On Cubist Pharmaceuticals

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Wedbush initiated coverage on Cubist Pharmaceuticals Inc (NASDAQ: CBST) with a Neutral rating and $70 price target.

Analysts led by Heather Behanna commented that "Cubist is in transition from a one-product company to a leader in the antibiotic arena. Cubist has three antibiotic products on the market with approval for its gram-negative compound, Zerbaxa, expected this year."

"We anticipate a decision/settlement between Hospira and Cubist for a generic daptomycin in the next six months, which we believe can impact shares. Our base case assumes a settlement with Hospira allowing for generic entry mid-2020 and a profit sharing agreement similar to the settlement with Teva. We see $3 upside to our price target if Hospira is barred from entry and $5-7 downside to our price target if Hospira can enter the market in 2020 without a profit split to Cubist," according to Behanna.

The report concluded that "while upside surprise is possible, we believe shares are fully valued at these levels based on limited organic growth projected for Cubicin and the anticipated slow launches expected for Cubist’s new antibiotic products. We believe Cubist may look to acquisitions to generate growth and further leverage its growing infrastructure both in the US and abroad."

Cubist Pharmaceuticals recently traded at $73.45, up 0.51 percent.

Latest Ratings for CBST

Dec 2014UBSDowngradesBuyNeutral
Dec 2014RBC CapitalDowngradesOutperformSector Perform
Dec 2014JefferiesDowngradesBuyHold

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Posted-In: Heather Behanna Hospira WedbushAnalyst Color Price Target Initiation Analyst Ratings


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