|Healthcare Review: Amyris, Humana, Concho Resources, Tekmira, Curis|
|By Staff and Wire Reports|
|Monday, 24 February 2014 14:41|
Pulling out of a sizable slide this year, Amyris ($AMRS) today is up sharply on big volume ahead of Q4 results after the bell, but Cowen's Robert Stone continues with an Underperform and $3 price target. The company has about $76.3M in cash, but a burn rate, according to Stone, of $15M-$20M per quarter, meaning it could all be gone this year and a 40% dilution as early as the first conversion dates in 2015 Q1. If the stock remains above the $2.44 and $2.87 conversion prices, says Stone, paid-in-kind interest adds about 4% more shares annually.
Humana ($HUM) surges to new 52-week highs after saying proposed rate cuts to Medicare Advantage plans weren't as bad as expected. Health insurers who run Medicare Advantage face a 3.55% base payment cut next year, the U.S. government said late Friday; HUM now estimates the final reduction will be 3.5%-4% after projecting a 6%-7% reduction during its Q4 conference call earlier this month. “Although we still believe rate pressure of this magnitude will present a significant challenge to the company/industry, it is certainly much better” than previous estimates, a Susquehanna analyst says.
Concho Resources ($CXO) continues to push higher after a positive mention by Ron Baron on CNBC before the open as the company he likes best to exploit the U.S. shale boom. CXO has been aggregating drilling lands, he says, "and once they have this acreage, they're going to be able to be acquisition candidates by the really big oil companies who don't want to do the legwork."
"When we first launched coverage of Tekmira ($TKMR) on June 18, 2013 at $4.80 we modeled our expectations with a high degree of conservatism using a 30% risk rate across the complete model," says analyst Jason Kolbert. "We are now lowering that discount rate from 30% to 15%."The new price target of $31 is up from $17 previously.
"We believe market growth (for Erivedge) will continue in 2014, providing a revenue stream and increasing visibility for Curis ($CRIS )," says analyst Joe Pantginis. He notes Erivedge revenue has grown continuously since its 2012 launch, with Roche reporting $28M in Q4 sales. Curis, of course, receives royalty payments on those sales. Adding to that, says Pantginis, is increased clarity on Curis' internal pipeline.