Baird Starts Onyx Pharmaceuticals (ONXX) at Outperform

Robert W. Baird initiates coverage on Onyx Pharmaceuticals Inc. (Nasdaq: ONXX) with an Outperform rating and $40 price target, citing dissipation of key overhangs, near-term commercial upside and valuation.

The firm said, "We are near-term buyers of ONXX shares as we think the dissipation of a number of key overhangs coupled with meaningful near-term commercial upside opportunities could lift shares in coming quarters. Coupling this with a compelling valuation (2009E EV/Sales of roughly half the level its mid-cap peers), we are buyers into the high-$30 range."

Baird notes ONXX is down 17% YTD on fears over flagship Nexavar's prospects. The said these risk are overblown.

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