Achillion Pharma: Color on JNJ partnership
- Maxim thinks the JNJ partnership is a good deal for both parties. The focus now is on both the value of the NS5A (which they believe is best in class) and the potential upside with ACHN-3422. With JNJ, multiple combinations may now come into play, all with the goal of developing a QD-STR (single-tablet regimen) that would be competitive with Gilead's (GILD - $110.56 - Buy) Harvoni and Sovaldi. They may even see an Achillion PI come into the mix. They believe the probability that Achillion will realize milestones and eventually royalties is quite high—high enough to justify their valuation arguments, which remain unchanged ($19 tgt). Investors should also note that the co now has a cash balance approaching $550-600M.
- UBS downgraded the stock to Neutral.
- JMP downgraded the stock to Mkt Perform.
- ACHN is down ~9% premarket as the JNJ partnership has likely disappointed many who thought ACHN would get acquired.