Leerink Partners Reiterates Outperform on Jazz Pharmaceuticals (JAZZ) as Investor Concerns Grow
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Leerink Partners reiterated an Outperform rating and $202.00 price target on Jazz Pharmaceuticals (NASDAQ: JAZZ) as investor concerns surrounding the stalled Xyrem patent settlement process continues to grow. The primary argument for the stall is that Hikma has until the May 2017 patent trial date to improve it's presumed offer to launch in mid-2025E.
Analyst "We remain OP on JAZZ. The company has massively underperformed large cap spec pharma in August driven by investor concerns that the Xyrem patent settlement process has stalled. In this report we analyze the pushes/pulls in the Xyrem settlement process and why we believe a settlement is the most likely outcome and a major catalyst for JAZZ. The primary argument for the stall in the settlement process is that lead filer Hikma (NR) has until the May 2017 patent trial date to improve the offer that is presumably "on the table" to launch in mid-2025E. With little risk to that offer being pulled, Hikma may try its luck getting certain patents invalidated through pre-trial motions, a process which is relatively expedient and low cost. For Hikma, speed to market, access to the Xyrem REMS program (risk mitigation strategy), and a broad market acceleration clause are all key areas JAZZ may need to step up its offer (vs. settlements reached with other generic Co's) to close the deal. Ultimately, we believe JAZZ has left itself valuable settlement terms to offer Hikma and a deal could occur before year end as JAZZ is in sync with advancement of its Xyrem 2.0 program."
Shares of Jazz Pharmaceuticals closed at $120.84 yesterday.
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