UBS Downgrades DepoMed Inc (DEPO) to Neutral

UBS downgraded DepoMed Inc (NASDAQ: DEPO) from Buy to Neutral with a price target of $20.00.

Analyst Ami Fadia cited:

(1) We see risk to mgt's 2016 sales guidance of $490-520M and consensus of $495M as the base business has underperformed our expectations and we do not believe that continued strength in Nucynta will be enough to offset this weakness.

(2) We no longer believe there is sig. upside to consensus sales numbers over the next 2-3 years. Nucynta ER prescriptions have been strong since Depomed re launched it in mid-2015, and while we believe it can still get to >$400M by 2018, we no longer see upside to consensus of $434M.

(3) While there may be upside of ~$2 for each year that Depomed can extend the life of Nucynta beyond 2023, we have limited visibility into the outcome of the Court decision expected by Sept 30th, or a potential settlement.

For an analyst ratings summary and ratings history on DepoMed Inc click here. For more ratings news on DepoMed Inc click here.

Shares of DepoMed Inc closed at $20.55 yesterday.

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