Mizuho Securities Raises Price Target to $36 Following Horizon Pharma's (HZNP) Announced Crealta Deal
Mizuho Securities reiterated a Buy rating on Horizon Pharma (NASDAQ: HZNP), and raised the price target to $36.00 (from $34.00), following the Crealta announcement. Horizon plans to acquire Crealta, a private company selling Krystexxa, a third line, Orphan biologic for the treatment of chronic, refractory gout. The deal represents a ~7x sales multiple in the $70-80M range in the first 12 months after deal close, but brings in a highly durable biologic with IP to 2027. Mizuho expects it to close in 1Q16.
Analyst Irina Koffler commented, "We maintain our BUY rating and raise PT to $36 from $34 following the Crealta announcement. We think this small deal should drive ~8% accretion in 2016. Separately, we see no slowing of Horizon's PME business and think there could be upside to our 2016 estimates. Horizon will be levered to ~2x adj. 2016 EBITDA, so deal flow could continue, in our view."
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Shares of Horizon Pharma closed at $18.99 yesterday.