Mackie cuts Cipher Pharma PT to $5.30 from $7.10

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Mackie Research Capital lowered its price target for Cipher Pharmaceuticals (TSX:CPH) to $5.30 from $7.10 after the company lowered first quarter expectations on the back of weak Absorica sales.

Analyst Andre Uddin writes that Cipher is working to layer on new products to its portfolio. The company recently in-licensed the Canadian rights for Trulance and A-101 40% topical solution from Synergy Pharma and from Aclaris Therapeutics, respectively. Cipher also is acquiring the Canadian business of Cardiome and its $200-million-plus (U.S.) in tax losses.

Regarding lower Absorica royalty revenues, Mr. Uddin said Cipher’s U.S marketing partner, Sun Pharma, is no longer using an aggressive coupon program and distributors have readjusted their inventory levels.

Mr. Uddin said he also has incorporated sales estimates of Trulance, A-101 and Cardiome’s Canadian business in his model. In addition, he has revised sales estimates of Cipher’s other products, as well as Cipher’s operating expenses.

Stephen KilmerCipher, TSX, TSX:CPH, CPH