A prime example of “one man’s failure is another man’s
success” was displayed for the world to follow today. Actavis (ACT) confirmed, after market
close, April 1st, 2012, that the District Court of New Jersey had ruled the patent
guarding AstraZeneca’s Asthma treatment drug, Pulmicort Respules, invalid. Upon
this news, ACT was happily greeted by bullish investors. Actavis stock price quickly
soared to a new 52 week high at today’s market open – ACT opened 5.1% above the
previous day close of $92.46 per share. Shortly after open, ACT again hit
another new 52 week high at $98.37 before leveling off in a range of $96.50 – $96.70. ACT eventually finished the day at $96.68, a 4.6% increase since the previous days close.
After initially losing a lawsuit last month that hindered
the growth of the firm within the generic Asthma universe, ACT has now been
given the right to sell the generic drug Pulmicort Respules. With a new outlook
on the market, ACT is looking to try and reap all the benefits of the nearly
$16.0B market. Actavis stated that new revenue attributable to Pulmicort
amounted to $1.2B. On top of all this already spectacular news, Morgan Stanley
has increased their target price to $101.00 per share along with an overweight
rating. We expect to see much growth in both the near and long-term future of
Actavis. We look forward to seeing their next quarter statements (TBA) and a
possible increase in management guidance.
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