4 Reasons To Own Horizon Pharma Shares

Horizon Pharma plc HZNP shares traded nearly 7 percent higher Wednesday. Investors in the name have responded to a couple news items, a new Outperform rating from BMO analyst Gary Nachman and news of the company's sNDA submission for Ravicti.

Nachman set a $29 price target on Horizon shares, a target which represented a near doubling of the price from the high $16 range the stock traded in during Wednesday's session.

The BMO analyst highlighted four reasons to own Horizon Pharma.

"[T]ransition to more of an orphan drug story is unfolding, including an attractive pipeline led by Actimmune for Friedreich’s ataxia (where we received positive physician feedback) that could provide a

• Very significant catalyst with Phase 3 data later this year and we see good risk/reward into that event.
• We believe HZNP has demonstrated strong operational execution with its M&A that differentiates it from some of its peers, and with low leverage and good cash flow it remains in a very strong position to pursue additional deals.
• We acknowledge the risks tied to the primary care portfolio that has experienced a great deal of managed care pressure that will likely persist, but we believe very conservative assumptions for that business are already factored into the stock and it could surprise on the upside.
• We see HZNP at an attractive valuation relative to its earnings power and strong cash flows, and with low expectations we see it as one of the better potential investments coming out of the recent sector downturn."