Steven Cohen of SAC CAPITAL

Steve Cohen’s SAC Capital Advisors has boosted its stake in The Medicines Company (NASDAQ:MCDO) to 2,706,765 shares. The hedge fund owns slightly more than 5.0% of outstanding shares in the company. As of September 30th, SAC owned 2.93% of the Parsippany, New Jersey based company, or 1,577,798 shares. The stake is worth approximately $55 million, based on The Medicines Company (NASDAQ:MCDO)’s closing price today of 20.89.

Analysts at Oppenheimer research initiated coverage on the company today with an outperform rating. They note the following drugs and valuation for their view:

Angiomax—A Growing Asset Providing The Brunt Of Current Valuation. The Medicines Company (NASDAQ:MCDO)’s primary asset, Angiomax, is an anticoagulant used in patients undergoing PTCA and PCI procedures. Despite a declining number of these procedures, they project sales growth as Angiomax continues taking share from heparin, particularly in the STEMI setting, where Angiomax only has ~30% share.

Oritavancin Is A High-Risk But Under-appreciated Asset. Despite a bumpy clinical history, if approved, they believe that Oritavancin would have an important place in the ABSSSI treatment landscape, capable of >$400M in peak sales. They look for data from two ongoing Phase III studies in 1H13 to serve as potential catalysts for the stock.

? Cangrelor Data Offers Second Near-Term Clinical Catalyst. Another key pipeline asset which they believe is underappreciated by investors is The Medicines Company (NASDAQ:MCDO)’s Cangrelor, an antiplatelet agent being developed to prevent thrombosis in PCI patients. Phase III data by YE12/early 2013 should shed light on Cangrelor’s commercial prospects, which they currently value at $2/share.

They believe that The Medicines Company (NASDAQ:MCDO) Shares are Undervalued Relative To their  DCF And Sum-Of-The-Parts Analysis. Their $35 price target is based on the average of their sum-of-the-parts analysis ($36/share) and their DCF ($34/share). Their analysis suggests Angiomax is worth ~$19/share, implying that, at current valuations, investors are getting a free call option on The Medicines Company (NASDAQ:MCDO)’s remaining pipeline.


For the six months ended 30 June 2012, The Medicines Company revenues increased 13% to $262.3M. Net income decreased 40% to $21.3M. Revenues reflect United States segment increase of 10% to $239.8M, Europe segment increase of 52% to $18.8M. Net income was offset by Legal settlement increase from $18M (income) to $0K, Research and development increase of 31% to $65.7M (expense).

Disclosure: No position