Canaccord Genuity Downgrades Orexigen Therapeutics (OREX) to Hold; Worst Case Scenario Occurred
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Price: $6.04 -0.17%
Rating Summary:
6 Buy, 5 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
6 Buy, 5 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Trade OREX Now!
Canaccord Genuity downgraded Orexigen Therapeutics (NASDAQ: OREX) from Buy to Hold.
Canaccord analyst says, "The worst case has occurred and the FDA has asked for a pre-approval study to assess the cardiovascular (CV) risk of obesity drug Contrave...We are very surprised by the news, given the positive FDA panel recommendation in December, which included a majority vote for a post-approval CV outcomes study."
"A new study will likely take 3-6 years and the company will need to raise additional capital to fund a new study. Raising cash through equity sales could prove to be extremely dilutive, as OREX may need to raise $100-200 million (or 1-2x the market cap at $2.50/share) to fully fund a new study. We note that there may be opportunities to fund a new study with capital from a restructured partnership with Takeda and/or from any new partnerships."
"Our price target is under review but we expect the stock to trade in the range of $2-3 in the near-term, reflecting the current value of the company’s cash and $40-$60 million of enterprise value."
For more ratings news on Orexigen Therapeutics click here and for the rating history of Orexigen Therapeutics click here.
Shares of Orexigen Therapeutics closed at $9.09 yesterday, with a 52 week range of $3.81-$11.15.
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Canaccord analyst says, "The worst case has occurred and the FDA has asked for a pre-approval study to assess the cardiovascular (CV) risk of obesity drug Contrave...We are very surprised by the news, given the positive FDA panel recommendation in December, which included a majority vote for a post-approval CV outcomes study."
"A new study will likely take 3-6 years and the company will need to raise additional capital to fund a new study. Raising cash through equity sales could prove to be extremely dilutive, as OREX may need to raise $100-200 million (or 1-2x the market cap at $2.50/share) to fully fund a new study. We note that there may be opportunities to fund a new study with capital from a restructured partnership with Takeda and/or from any new partnerships."
"Our price target is under review but we expect the stock to trade in the range of $2-3 in the near-term, reflecting the current value of the company’s cash and $40-$60 million of enterprise value."
For more ratings news on Orexigen Therapeutics click here and for the rating history of Orexigen Therapeutics click here.
Shares of Orexigen Therapeutics closed at $9.09 yesterday, with a 52 week range of $3.81-$11.15.
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