|Healthcare Review: Zalicus, Herbalife, BioTelemetry, Boston Scientific, McKesson|
|By Staff and Wire Reports|
|Thursday, 24 October 2013 14:39|
Shares of Zalicus ($ZLCS) are up sharply on the session. Helping the cause is SA contributor Jason Napodano, who calls Z160 a "potentially an enormous drug if it works in both PHN and LSR. "More specifically, Napodano says positive results from two Phase 2a studies may mean "the drug can ... capture 25% of the market from Lyrica and generic gabapentin [putting] worldwide sales in the area of $1.5B."If we assume $1.5B in sales a decade from now, along with a 30% chance of success and a price-to-sales multiple of three, we get a target price of around $14 after discounting back to the present at 15%, Napodano says. The analyst is looking for data "by the middle of November."
Bill Ackman's new put position in Herbalife ($HLF) is having a tough day as the man with the hot hand - Carl Icahn - tells the Fast Money crew the stock remains very undervalued. "I didn't do all this in-depth research all these people were doing ... I never would have been in it if I had liked [Ackman] in the first place." Icahn, of course, just freed up about $3.5B with sales of Netflix, Dell, and other names, and there is the chance he could use some of that firepower in Herbalife, though returning cash to investors and/or another activist target seems a more likely idea. Earlier: Icahn discloses he's upped his stake in Apple by 700K shares (about $350M).
Shares of BioTelemetry ($BEAT) climb after Benchmark initiated the stock at Buy with a PT of $15 (seeing upside of 59% from yesterday's close).Analyst Jan Wald says BioTelemetry has done more than just change its name (to CardioNet) - "it has metamorphosed ... into more than a one product-line company that was held captive to a CPT code. It now has a portfolio of product offerings ranging from services to products in relatively diverse segments of the cardiology diagnostic space."
Boston Scientific ($BSX) slides after posting a narrow Q3 top line beat. Adjusted EPS came in ahead of the high-end of company guidance. Global sales growth by segment (constant currency): Peripheral Interventions, +7%; Cardiovascular, +1%; Cardiac Rhythm Management, +1%; Electrophysiology, -1%; Rhythm Management, +1%; Endoscopy, +8%; Urology/Women's Health, +8%; Neuromodulation, +12%; MedSurg, +12%.The company is instituting a 2014 restructuring plan which will "include continued implementation of BSX's ongoing Plant Network Optimization strategy, continued focus on driving operational efficiencies and ongoing business and commercial model changes."
Leerink weighs in on McKesson's ($MCK ) deal for Celesio. "It appears MCK will be acquiring all of Celesio, which we view favorably, since it will give the company [the] operational control necessary to drive synergies," analyst David Larsen says, adding that "the benefits of the deal include increased supply chain efficiency and global sourcing, global distribution and logistics capabilities that bring new value and service to manufacturing partners, innovative technology and business services and efficiencies."