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Piper Jaffray Staying Bullish On Mallinckrodt

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Physicians and practices are likely become increasingly consistent with writing Acthar prescriptions, Piper Jaffray’s David Amsellem said in a report. While expressing optimism regarding Mallinckrodt PLC’s (NYSE: MNK) volume growth over the long-term, the analyst reiterated an Overweight rating on the company and raised the price target from $103 to $112.

Acthar Payer Contracting Prospects

During its fiscal 3Q16 call, Mallinckrodt had noted that Acthar is contracted with payers who account for more than half of the covered commercial lives.

Analyst Amsellem mentioned that access to Acthar continues to be restricted to patients who are running out of treatment options. He added, however, that what is of significance is that Mallinckrodt is now “standardizing how Acthar is covered across payers, making the process of getting an Rx filled more predictable for the physician practice.”

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Once the process becomes more predictable for practices, existing Acthar writers would likely become more consistent in their prescribing behavior and physicians who are new to Acthar would find it easier and begin using it for their patients, Amsellem stated.

“The backdrop of course includes a growing body of clinical data (e.g., the lupus data presented in November 2015) that MNK can then leverage in its discussions with payers,” the analyst wrote.

Taking into account Mallinckrodt’s contracting efforts as well as a steady flow of additional clinical outcomes data indicate that the company would be able to generate “relatively strong volume growth over the long-term,” Amsellem added.

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Latest Ratings for MNK

Feb 2018BarclaysDowngradesEqual-WeightUnderweight
Jan 2018Leerink SwannInitiates Coverage OnMarket Perform
Nov 2017OppenheimerDowngradesOutperformPerform

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