Market Overview

Oppenheimer Raises Its Prognosis For The Medicines Company

Oppenheimer Raises Its Prognosis For The Medicines Company
Related MDCO
Delivering Alpha 2018: Everything You Need To Know
Benzinga's Biotech Pulse: Takeda Sweetens Shire Offer Again, Menlo's Woes Abound, Earnings Fail to Boost Amgen

The Medicines Company (NASDAQ: MDCO) announced Wednesday an agreement to sell its infectious disease business unit to Melinta Therapeutics, Inc. (NASDAQ: MLNT) for $270 million upfront. 

As part of the deal, Medicines Company would receive royalty payments of 5-25 percent on worldwide net sales of Vabomere, Orbactiv and Minocin.

The company said it plans to narrow its focus to inclisiran, transitioning to a pure-play R&D biotech company in the process. 

The Analyst

Oppenheimer analyst Jay Olson reviewed the development and upgraded his rating on the shares of Medicines Company from Perform to Outperform, with a 12-to-18-month price target of $50.

The Thesis

With the proposed sale, Medicines Company was able to generate non-dilutive funding for inclisiran development, Olson said in a Wednesday note. (See Olson's track record here.)

Inclisiran is an experimental cholestrol drug. 

The proceeds from the sale along with restructuring will provide enough cash to develop inclisiran up to NDA submission, planned for 2019, and no equity issuance is warranted at this time, Olson said.

"We believe PCSK9 market dynamics should improve with label inclusion of CV outcomes data creating potentially positive impact on guidelines and reimbursement," Olson said of the inclisiran opportunity. Inclisiran is well-differentiated and may enter a very different PCSK9 market by 2020, the analyst said. 

The Price Action

Medicines Company shares have been on a secular decline since early April, having lost about 11 percent year-to-date.

At the time of writing, the shares were rallying 2.77 percent to $31.

Related Links:

Attention Biotech Investors: Mark Your Calendar For These December PDUFA Dates

Medicines Company Gets FDA Approval, Has 119% Upside According To This Analyst

Photo courtesy of The Medicines Co.

Latest Ratings for MDCO

Nov 2017OppenheimerUpgradesPerformOutperform
Oct 2017GuggenheimInitiates Coverage OnBuy
Aug 2017CitigroupMaintainsNeutral

View More Analyst Ratings for MDCO
View the Latest Analyst Ratings

Posted-In: Analyst Color News Upgrades Health Care Price Target M&A Analyst Ratings General Best of Benzinga


Related Articles (MDCO + MLNT)

View Comments and Join the Discussion!

ICYMI: Apple Is Gaining Ground On Activated Smartphones In China

Tech ETFs And Stocks Tumble: Time To Buy?