Guggenheim Confident Horizon Pharma (HZNP) Can Get Depomed (DEPO) Deal Done; Sees 53% Upside Upon Closing

Guggenheim analyst Louise Chen reiterated a Buy rating on Horizon Pharma (NASDAQ: HZNP) after the company announced two steps forward in its potential acquisition of Depomed (NASDAQ: DEPO): 1) Submitted a request to set a record date to determine SH's eligibility to request a special meeting; and 2) Filed a lawsuit in the Superior Court of CA challenging the legality of DEPO's poison pill.

"After speaking with management, we remain confident that HZNP will move aggressively to get the DEPO deal done," Chen said. "We expect a resolution by 1Q16, if not earlier. HZNP is well prepared to move through the process.Importantly, most, if not all, of the concerns on HZNP have already been widely debated (PME, exclusion lists, pricing etc.), and HZNP has shown these concerns are likely overdone. In fact, HZNP pre-announced a 2Q15 beat and raised its '15 financial guidance on 7/20/15. Therefore, we think it may be hard for DEPO to find new ways to discredit HZNP's currency if it were to go down that path."

The analyst said the stock could be worth $56 (53% upside potential) if they closed the DEPO deal.

For an analyst ratings summary and ratings history on Horizon Pharma click here. For more ratings news on Horizon Pharma click here.

Shares of Horizon Pharma closed at $36.85 yesterday.

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