On Wednesday, Leerink Partners initiated coverage on shares of ANI Pharmaceuticals (NASDAQ:ANIP) with an Outperform rating and a price target of $80.00.
The firm highlighted the company's transition towards branded drugs, particularly in the specialty rare disease sector, as a key factor for its positive outlook. According to InvestingPro data, the company has received positive attention from analysts, with three analysts recently revising their earnings expectations upward.
According to Leerink Partners, ANI Pharmaceuticals, traditionally known for its generics manufacturing, has been redirecting its cash flow into branded specialty rare disease products, which now comprise nearly half of its business.
The strategic shift appears to be paying off, with InvestingPro data showing impressive revenue growth of 23.6% over the last twelve months, reaching $555.46 million. This strategic shift is expected to drive durable growth for the company.
The firm's analysis suggests that ANI Pharmaceuticals is trading at a modest premium compared to its specialty and generics peers, based on the projected 2025 Enterprise Value to EBITDA (EV/EBITDA) ratio.
ANI's ratio stands at approximately 9.0 times, versus the peer group average of around 8.1 times. Current InvestingPro analysis indicates the stock is fairly valued, with a Financial Health Score rated as "GREAT" at 3.13 out of 5.
Leerink Partners anticipates that ANI Pharmaceuticals will experience multiple expansions as the market begins to recognize the company's growth opportunities in the rare disease space and as it continues to enhance its portfolio in this area.
The Outperform rating and $80 price target are derived from a Discounted Cash Flow (DCF) analysis, reflecting Leerink Partners' confidence in ANI Pharmaceuticals' potential for growth and market revaluation.
In other recent news, ANI Pharmaceuticals has continued to surpass revenue expectations, marking the tenth consecutive quarter of such performance. The company's total revenues reached $148.3 million in the third quarter of 2024, a 13% increase year-over-year, driven primarily by the robust performance of Cortrophin Gel, which saw a 77% surge in revenue.
In addition, the successful integration of the recently acquired Alimera (NASDAQ:ALIM) has added to the company's growth, with the partial-quarter sales from Alimera's products matching H.C. Wainwright's projection.
In the wake of these developments, H.C. Wainwright has maintained a Buy rating for ANI Pharmaceuticals, citing the company's consistent performance and ability to outperform conservative guidance.
The firm also noted ANI's potential for premium valuation compared to other generic pharmaceutical companies. Meanwhile, ANI Pharmaceuticals has raised its full-year revenue guidance for Cortrophin Gel due to strong demand and new product launches.
Looking forward, ANI Pharmaceuticals anticipates strong growth in its Rare Disease segment, which is expected to become the largest business unit by 2025. The company is also developing a pre-filled syringe for Cortrophin Gel, aiming for a launch in the first half of 2025. These are among the recent developments for ANI Pharmaceuticals.
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