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Jefferies Downgrades La Jolla On Weak Forecast For Blood Pressure Drug

Jefferies Downgrades La Jolla On Weak Forecast For Blood Pressure Drug

In the absence of a potential buyout, the downside risk for La Jolla Pharmaceutical Company (NASDAQ: LJPC) is greater than the upside potential in the next two to three years, according to Jefferies. 

The Analyst

Jefferies analyst Eun Yang downgraded La Jolla from Buy to Underperform and lowered the price target from $40 to $29, suggesting 21-percent downside from current levels.

The Thesis

Polls with critical care physicians and pharmacy and therapeutics committee members showed only a modest sales opportunity for Giapreza, La Jolla's drug for low blood pressure, Yang said in a Monday note.

The Giapreza poll results point to 20- and 30-percent penetration of Giapreza in 2L and 3L, respectively, translating to a peak U.S. sales estimates of $324 million versus a prior estimate of $535 million, according to Jefferies.

The difference is due to lower transaction cost — $4,500 rather than the previous $8,000 — and a slightly higher number of patients. 

La Jolla shares have gained 15 percent year-to-date compared to a 1-percent drop for the Nasdaq Biotechnology Index.

In December, HC Wainwright initiated coverage of La Jolla with a Buy rating and a $62 price target, citing a Feb. 28 PDUFA date for LJPC-501, a treatment candidate for vasodilatory shock.

The Price Action

La Jolla shares are up about 90 percent over the past year.

Shares were sliding more than 7 percent percent to $34.21 Monday morning. 

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Latest Ratings for LJPC

Nov 2019H.C. WainwrightDowngradesBuyNeutral
Nov 2019SunTrust Robinson HumphreyDowngradesBuyHold
Jan 2019JP MorganUpgradesUnderweightNeutral

View More Analyst Ratings for LJPC
View the Latest Analyst Ratings


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