Medicines (MDCO) Loss of Exclusivity on Angiomax Seen as 'Anticipated Event' - RBC

RBC Capital maintained an Outperform rating on The Medicines Company (NASDAQ: MDCO) with a price target of $39. Earlier Medicines lost an appeal in a case related to Angiomax patents. Analyst Adnan Butt said loss of exclusivity was already in his model and was likely consensus.

"We believe exclusivity loss for Angiomax should be a clearing event: it was anticipated and already reflected in our forecast P&L. Now focus shifts to shares being fundamentally undervalued, solid pipeline potential, and upcoming positive catalysts as soon as summer 2015. There are likely valuation tweaks and guidance changes coming but Angiomax was no longer a downside driver and decision is an overhang removed," said Yee.

"Loss of Angiomax exclusivity was largely consensus view so a negative litigation outcome should be more a clearing than a negative event especially over time. We had previously stated a negative ruling could be used as a buying opportunity since shares are fundamentally undervalued using several metrics. We had sales coming down to $300M in 2015 already (from $600M in 2014) and to $150M in 2016. While both estimates and guidance are likely going to change, we still view this as an anticipated event (currently ~$3–4/ share in our model)," added the analyst.

For an analyst ratings summary and ratings history on The Medicines Company click here. For more ratings news on The Medicines Company click here.

Shares of The Medicines Company closed at $28.34 yesterday.

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