Credit Suisse Upgrades Clovis Oncology (CLVS) to Outperform on Takeout Potential
- Wall Street climbs in wake of first presidential face-off
- Nike (NKE) Tops Q1 EPS by 17c; Futures Orders Miss Views
- Tempur Sealy (TPX) Updates on Outlook; Sees Q3 Sales Below Prior Expectations
- Galectin (GALT) Reports Exploratory Phase 2a Pilot Trial of GR-MD-02 in Nash Misses Primary Biomarker Endpoint; Announces $1.5M Private Placement
- After-Hours Stock Movers 09/27: (SEED) (GALE) (CTAS) Higher; (GALT) (TPX) (NKE) Lower (more...)
Get inside Wall Street with StreetInsider Premium. Claim your 2-week free trial here.
Credit Suisse upgraded Clovis Oncology (NASDAQ: CLVS) from Neutral to Outperform with a price target of $41.00 (from $19.00).
Analyst Kennen MacKay commented, "We upgrade CLVS to OUTPERFORM from NEUTRAL and increase our target price to $41 from $19. We move our valuation methodology to an M&A DCF from a standard DCF on the potential for CLVS to be a takeout target for a global pharma company, Japanese pharma, or biotech company. Our base-case M&A DCF assumes a -50% cut to CLVS R&D, -50% cut to CLVS SG&A, no change to CLVS COGS, a 35% tax rate, and a 10% increase in product sales. We view this as a conservative M&A valuation, given an acquirer could potentially see tax synergies and further increases to product sales. Following FDA acceptance of CLVS’s rucaparib NDA in 3L g/sBRCA treatment, we continue to await data at ESMO (Oct 7) to get a better sense of rucaparib’s competitive profile vs. Lynparza and efficacy in platinum resistant/refractory patients. We concede potential acquisition outweighs concerns surrounding patent life, limited experience in platinum resistant/refractory patients, and PARPi competition."
The firm conducted an acquisition scenario analysis for parties that have expressed interest in acquiring US oncology companies such as Lilly, Merck, Takeda, and others. The analysis suggests CLVS could be worth $35-$41/sh on operational synergies, and $52-$55/sh with leveraged tax benefits.
Shares of Clovis Oncology closed at $34.83 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Goldman Sachs Thinks Lilly (LLY) is Compelling With or Without Potential Blockbuster AD Drug Sola; Analyst Raises Rating to 'Buy'
- Roth Capital Trims PT on Ligand Pharma (LGND) to $150 Amid New Kyprolis Data (AMGN)
- Stifel Raises Price Target on SYNNEX Corp. (SNX) to $104 Following 3Q Beat and Raise
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Hot Upgrades, Rumors, Trader Talk, Upgrades
Related EntitiesCredit Suisse, Definitive Agreement
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!