Sources familiar with the situation say the company has had multiple approaches around $20. They have recruited advisors to auction to the highest bidder from both the US and Europe.
The average analyst price target is $24, with a successful bid likely to be over $30 and up to $35. Biogen (BIIB), Amgen (AMGN), and Pfizer (PFE) are the US companies reportedly in the frame. In the UK, AstraZeneca (AZN) is leading the European bidders. Goldman Sachs and J.P. Morgan are allegedly involved in the auction process.
Background:
In the wake of the massive success of companies addressing large, unmet needs, such as the weight loss jab brigade, the pharmaceutical industry seems to be split between those companies with huge markets and those like Zevra Therapeutics, which specialise in rare diseases. What has been interesting in recent weeks is the way that the shares have been on the receiving end of very positive analyst coverage.
This has particularly focused on the European growth prospects for the company, which are expected to align with those of North America. The kicker in this respect was FDA approval in September for the company’s Niemann-Pick disease type C (NPC), a neurodegenerative disease caused by lysosomal dysfunction. EU approval is what the market is currently looking forward to.
Outlook:
What is interesting about the stock near $12 is that it is still well below Cantor Fitzgerald’s latest price target hike from $25 to $29. The most surprising aspect about the stock’s performance is the way that the shares have only recently broken the $10 zone highs seen in the wake of the FDA thumbs up in September. Last year’s red trend channel points to an initial $17 price target in coming weeks, while above $10. Given the reported interest in the company one would regard $20 plus to be the new base for the shares.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
