Jefferies Cuts Price Targets on Avanir Pharmaceuticals (AVNR) as Growth Lags

Jefferies is maintaining its Hold rating on shares of Avanir Pharmaceuticals (NASDAQ: AVNR), but is lowering its price target from $3.50 to $3.00 following the release of its FY11 results.

The firm highlights weekly Nuedexta sales from 2/18 to 12/2 rose less than roughly 30 new patients per week while remaining robust linear. With management's run rate of 1,200+ RX/week, the Jefferies forecasts AVNR will reach breakeven in 2016.

An analyst at Jefferies comments, "While we continue to believe that Nuedexta may become an attractive drug, addressing a large market opportunity for PBA, we note that sales have yet to accelerate. Our current valuation already assumes a long 7 year period of linear growth in sales, so significant upside to the valuation would require an acceleration in uptake. Based on management commentary and physician feedback, we believe that the primary barrier to adoption remains the relatively low priority that physicians place on the diagnosis and management of PBA in patients with complex and debilitating neurological disorders. We expect considerable marketing effort would be required for Nuedexta to ramp to a nonlinear sales trajectory."

For Q1, the firm estimate EPS of ($0.11) and is lowering its FY12 estimate from ($0.32) to ($0.43).

For an analyst ratings summary and ratings history on Avanir Pharmaceuticals click here. For more ratings news on Avanir Pharmaceuticals click here.

Shares of Avanir Pharmaceuticals closed at $2.28 yesterday.

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