Canaccord Genuity on Life Sciences/Biotechnology: Maintains 'Buy' on MNTA & WPI
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Price: $85.73 --0%
Rating Summary:
13 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
13 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity on Life Sciences/Biotechnology: Temp. restraining order, potential preliminary injunction against Amphastar/WPI on enox characterization; maintain BUY on MNTA, WPI
Analyst, Ritu Baral, said, "Temporary restraining order raises small but distinct possibility of injunction: scenario analysis shows large potential upside for MNTA if preliminary injunction issued, small upside for Watson (NYSE: WPI) if not; no change for Momenta (Nasdaq: MNTA) in base case, which we feel is most likely."
"Potential, if unlikely, MNTA upside: $8/share, continued profitability. If MNTA gets a preliminary injunction (which could last 20+ months) against Amphastar/ Watson, we think continued profit share revenues could add $8+ to our target. This may mean EPS upside of $1.10 for 2011, $4.71 for 2012, $2.66 for 2013. We think an injunction here may mean MNTA could also get injunctions any other approved generic enoxaparins – preserving sole generic status, market share, price and partnership economics."
"Potential impact to Watson is $0.33 per share, or 5% upside to 2012E EPS. We would note two things: (1) a generic Lovenox launch was not included in management’s last guidance update (2) EPS benefit unlikely baked into consensus numbers. While only a small potential incremental positive should Momenta not receive an injunction, it reinforces our BUY-rating thesis that Watson has a strong, visible generic pipeline with upside from new launch opportunities."
Analyst, Ritu Baral, said, "Temporary restraining order raises small but distinct possibility of injunction: scenario analysis shows large potential upside for MNTA if preliminary injunction issued, small upside for Watson (NYSE: WPI) if not; no change for Momenta (Nasdaq: MNTA) in base case, which we feel is most likely."
"Potential, if unlikely, MNTA upside: $8/share, continued profitability. If MNTA gets a preliminary injunction (which could last 20+ months) against Amphastar/ Watson, we think continued profit share revenues could add $8+ to our target. This may mean EPS upside of $1.10 for 2011, $4.71 for 2012, $2.66 for 2013. We think an injunction here may mean MNTA could also get injunctions any other approved generic enoxaparins – preserving sole generic status, market share, price and partnership economics."
"Potential impact to Watson is $0.33 per share, or 5% upside to 2012E EPS. We would note two things: (1) a generic Lovenox launch was not included in management’s last guidance update (2) EPS benefit unlikely baked into consensus numbers. While only a small potential incremental positive should Momenta not receive an injunction, it reinforces our BUY-rating thesis that Watson has a strong, visible generic pipeline with upside from new launch opportunities."
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