Roth Capital Says to Buy Ligand Pharma (LGND) on Today's 'Bad' Downgrade
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Roth Capital affirms Ligand Pharma (Nasdaq: LGND) at Buy with a price target of $149 following Deutsche Bank's downgrade to Sell on the stock today.
Analyst Joseph Pantginis commented today,
Our ongoing thesis for Ligand has been one of accumulation over the long term and believe today's weakness offers an opportunity for just that. There has been no call, to date, by the competitor and has been in cruise control at Hold, until now. Except, we believe that there is no call here. While we always maintain vigilance on valuation, the meandering, almost random, thoughts in the downgrade are very short-sighted, in our belief. It focuses on risk to the core revenues of Promacta and Kyprolis and places little to no emphasis on pipeline valuation and upcoming drivers.
We have consistently addressed many of the underlying themes in our case that were included in today’s downgrade. We will address a few. Regarding revenue momentum, it not only remains growing, it is being added to (e.g. Evomela - 20% royalty). The core Promacta and Kyprolis revenue is buffered and we have emphasized some potential volatility for Kyprolis due to the competitive landscape (i.e. Darzalex) but KOLs point to the need for a proteasome inhibitor as a backbone to multiple myeloma therapy. Both drugs continue to grow, and get additional label expansions and geography approvals and represent a core base and a buffer to downside. Regarding the pipeline, we maintain that the later stage clinical assets hold significant value and a key catalyst this quarter is the Phase IIb readout of the DUET study for Retrophin's sparsentan in FSGS, the analyst noted.
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