Delay in Generic Acne Meds Lifts Medicis 24%

[Stocks-to-Watch]

Shares of Medicis Pharmaceutical (MRX) hit a new 52-week high today after climbing 24% this morning on news that a generic version of its popular acne medication will be later than expected hitting the U.S. market.

Medicis traded at $32.26 a share in late morning market actions, climbing $6.44 a share. When announcing fourth-quarter financial results this morning, Medicis revealed today that it has reached a settlement with Teva Pharmaceutical Industries (TEVA) that grants the generic-drug giant a license to sell versions of the acne medication Sodolyn starting in 2018, which is later than many expected. Generic rivals usually steal business from branded medications. As such, Medicis should be able to maintain Sodolyn sales ($400 million in 20100 for the next seven years, wrote Ken Cacciatore, an analyst with Cowen, in a note published today.

Others are equally enthusiastic. Piper Jaffray upgraded shares of Medicis today to Overweight, expressing “more confidence that cash flows from MRX’s flagship product are sustainable,” and hiked its 12-month price target to $38 share from $30 a share.



Original Article Source by Barrons.com