Oppenheimer Downgrades Dyax

In a report published Monday, Oppenheimer analysts downgraded

from Outperform to Market Perform, while removing the price target. The company's share price has surged 157 percent since Oppenheimer initiated coverage on February 27, 2014. This jump compares with a 15 percent rise in the S&P 500 and a 30 percent gain in the NASDAQ Biotechnology Index over the same period. Dyax's share price has been boosted by the initial clinical success for DX-2930 in HAE. "While we continue to view DX-2930 as the leading candidate for best-in-class potential in HAE, we believe shares are appropriately valued at current levels. Moreover, we think the stock could be singled out if the biotech sector sells off given the very high valuation attributed to a small Phase 1b data set," the analysts wrote. The analysts believe that upside potential for the company's share price appreciation is "tied to M&A speculation," taking into account the "attractiveness of orphan drug products," for instance the recent deal between

and

. In the report Oppenheimer noted, "…we are more cautious that a buyer will step in at this valuation without a larger dataset to corroborate the Phase 1b DX-2930 results…we believe our Perform rating balances the probability of the company being acquired at a significant premium above current levels vs. the probability of a disproportionate sell-off in DYAX stock should the biotech sector experience a period of short-term volatility at any point during the next 12 months."