Needham & Company: Thoughts Heading Into Par Pharmaceutical's (PRX) January 6, Analyst Day; Generics Take Center Stage

Needham & Company maintains a 'Strong Buy' on Par Pharmaceutical (NYSE: PRX) price target of $41.00.

Needham analyst says, "What are we looking for? Clearly the "Big Reveal" will be updated long-term EPS guidance. PRX historically has provided cumulative 3-year EPS guidance, initially, back in late ’09, $6.00 cumulatively for the 2010-2012 period and updated to at least $10.00 for 2011-2013 in January 2011. For Needham & Company, LLC Equity Research Morning Summary 12 the 2012-2014 period, we are estimating 3-year cumulative earnings of $11.31 vs. current consensus of $10.87. Given lack of visibility on many non-disclosed generics and potential big hits such as generic Lovaza or high-margin controlled release products from the Anchen pipeline, we believe the bias is squarely to the upside. Management has historically provided good visibility on margin and op ex expectations for the coming fiscal year (2012) though has been non-committal on specific near-term EPS and revenue expectations. Our wish list certainly would contain front-year specific targets so that we could better gauge out year pipeline expectations but concede the chances of such are minimal. While we fully expect a deep dive on the pipeline, we are particularly intrigued by the potential for some non-disclosed generics of alternative dosage forms (patches, transdermals, injectables, etc) under development by partner TWi Pharma, a Taiwanese-based developer run by Anchen’s founder. It appears Anchen is developing a generic Voltaren gel through this partnership and we also believe Anchen, either via TWi or another partner, has some economic interest in a generic Lidoderm product as well."

"...PRX’s generic division has been a strong execution story since its initial turnaround in late ’08 and major cost restructuring in early 2011. Clearly generics represent the immediate and intermediate future and given strong pipeline dynamics, we continue to believe reward/risk remains favorable in shares."

For an analyst ratings summary and ratings history on Par Pharmaceutical click here. For more ratings news on Par Pharmaceutical click here.

Shares of Par Pharmaceutical closed at $32.76 yesterday.

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