Brean Capital Cuts Price Target on Cardiome Pharma (CRME) to $7; Reiterates Buy
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Brean Capital maintained a Buy rating on Cardiome Pharma (NASDAQ: CRME), and cut the price target to $7.00 (from $10.00), as the company maneuvers to secure financial funding. Cardiome raised $34.5 million of equity by offering 11.5 million shares. As a result, the share price declined from $5.30 prior to the announcement to $3.14 as of the close on 8/1/2016. Estimated cash ($47 mil) + additional debt facility ($10 mil) should give Cardiome roughly $57 million to draw from.
Analyst Difei Yang commented, "The company has completed a number of financial maneuvers during the past two months that should secure the necessary funding for the company to operate until reaching sustainable profitability. While the deal was dilutive and caused a share price reset, we believe it also lifted the overhang. Moving forward, the following catalysts could lift the shares from their current depressed level: 1) revenue growth in new products, in particular, Xydalba in 2017 and Esomocard in late 2016/2017; and 2) an additional $10-15 million asset that would bring the company to breakeven point earlier than the current projection of late 2018/early 2019."
Shares of Cardiome Pharma closed at $3.19 yesterday.
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