While patents are a big deal in the tech world, they are just as important in the biopharmaceutical industry. Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) recently asked the U.S. Patent Office to extend one of its patents on their multiple sclerosis drug, Copaxone. There are several drug companies battling to make a generic version of the profitable medicine, and Teva Pharmaceutical is doing everything it can to protect its proprietary drug. However, regardless of whether generic versions of Copaxone end up being produced, National Alliance analyst Corey Davis is recommending BUY Teva Pharmaceutical.
Corey recommends BUY Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) with a $64 price target arguing, “Our BUY rating on Teva Pharmaceutical emanates from: 1) it did not participate in the large run that many of its peers had last year; 2) now has the most momentum; 3) carries the lowest valuation in the group; 4) has the best chance for a “turnaround”; and 4) because we think the chance for generic Copaxone in May is remote. However, if we’re wrong on #4, we see little downside since most already see it as the #1 risk.”
The pharmaceutical industry is Corey’s specialty, and his recommendations about companies such as Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) and Elan Corporation, plc (ADR) (NYSE:ELN), have helped earn him the number 6 spot out of 2979 analysts. To learn about all of the recommendations that helped earn Corey a +10.8% average return over S&P-500 and a 71% success rate of recommendations, download TipRanks.
While this is Corey’s first time publically recommending Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), Corey has recommended Vanda Pharmaceuticals several times, including June 2013. On June 20, 2013, Corey reiterated his BUY rating on Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) and raised his price target from $7 to $11. The stock had just experienced a 22% sell-off based on a negative article from TheStreet, but Corey argued, “VNDA’s up >100% since our upgrade and despite new Tasi approvability fears we remain optimistic given its robust clinical effect, placebo-like safety (lowers benefit/risk hurdle), and an orphan indication rather than an ‘insomnia’ claim (there won’t be off-label use). Following NDA filing we lower the Tasi DCF discount rate a smidge, tweak up estimates, and raise to $11 PT.” This recommendation ended up earning Corey +46.8% over S&P-500.
During the same month, Corey recommended BUY Elan Corporation, plc (ADR) (NYSE:ELN). When the company was in discussions about a takeover, (before they were acquired by Perrigo Company at the end of 2013) Corey agreed to supporting, “$19/share bid, but only from a high taxpaying suitor.” Corey even named some specific buyers he felt were valuable including Allergan, Inc. (NYSE:AGN) and Regeneron Pharmaceuticals Inc (NASDAQ:REGN). Before the company dissolved into Perrigo, Corey’s recommendation earned him +7.9% over S&P-500.
However, even though Corey holds a top ten ranking, his recommendation history is not 100% perfect. Corey’s 70% success rate leaves room for a loss here or there, including his recommendation to BUY Pacira Pharmaceuticals Inc (NASDAQ:PCRX). On March 18, 2014 Corey initiated coverage on PCRX with a BUY rating and a price target of $109. Corey was focused on their major drug, Exparel, and believed it had strong selling points. Corey noted, “[Exparel has] been on the market for 7Q’s, and on a run-rate >$150M in 2014. It’s an extended release version (lasts 72 hours) of bupivacaine (only 8 hours) that is commonly used to blunt post-surgical pain. Its selling points are reduction in opioid usage and shorter hospital stays; therefore it is more cost effective than current procedures. We see Exparel climbing over $700M in 2017, which would drive tremendous EPS of $7.67.” However, Corey has not yet seen the positive return that he expected and has lost -13.4% over S&P-500, but the recommendation is still open and has time to bounce back.
To see if Corey’s PCRX recommendations climbs back up, and to see the outcome of his Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) recommendation, be sure to download TipRanks and start making informed financial decisions with advice you can trust.
