Needham analyst Ami Fadia has maintained their bullish stance on JAZZ stock, giving a Buy rating on February 27.
Ami Fadia has given his Buy rating due to a combination of factors that highlight the strategic benefits of Jazz Pharmaceuticals’ recent acquisition of Chimerix. This acquisition is seen as a complementary addition to Jazz’s existing portfolio, particularly enhancing its presence in the rare oncology sector. The deal, valued at approximately $935 million, is considered significant for Jazz, with the potential to bolster its market position through the lead asset, dordaviprone.
Fadia estimates that Jazz paid around 2-2.5 times the peak sales for dordaviprone, which is currently undergoing regulatory review for second-line treatment and is in Phase 3 trials for first-line treatment of a specific type of glioma. The potential market opportunity for dordaviprone is substantial, with projections suggesting peak sales of about $450 million globally. This figure is supported by the annual incidence rates of the targeted glioma and the pricing typical for rare oncology indications. Furthermore, Chimerix’s management and external estimates indicate an even larger market potential, suggesting upside to these sales projections. Despite inherent risks in deal closures, Fadia sees no significant regulatory concerns and believes the high premium paid by Jazz will likely prevent competitive bids from other parties.