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| Tuesday, 15 May 2012, 19:50 HKT/SGT | |
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Vancouver, BC, May 15, 2012 - (ACN Newswire) - Shares of Obagi Medical Products (NASDAQ:OMPI) rose 4.69% on Monday to $12.95 +0.58 and traded as high as $13.15 after being mentioned as a possible acquisition candidate for the second time in as many weeks.
In a note to institutional clients about Medicis (NYSE:MRX), Cantor Fitzgerald analyst Irina Rivkind wrote that an asset replacement has gotten more critical for the company given that Medicis is facing asset attrition from Hyperion, Vanos,and MaxAir in the 2013-2014 time frame.
Cantor Fitzgerald feels that cash from Medicis' recently announced $450 million financing "will be used to support M&A rather than share buy-backs."
"We have previously written that Medicis may opt to license privately-held Revance's topical toxin, and estimated a U.S. license for ~$250M with +$2-3 upside to the stock," wrote Rivkind. " We think the timing of the Revance negotiation could occur in the next six months, but we lack strong conviction around this event and don't think it would be immediately accretive. There are other aesthetic companies in the space which are already profitable, such as Obagi and privately-held SkinMedica, that we believe could be immediately accretive and also attainable for the company. Furthermore, we think that Medicis may find Obagi's internet pharmacy initiative strategically interesting to further innovate its "alternative fulfillment" program and generate additional revenue in its acne franchise."
Obagi, a leader in topical aesthetic and therapeutic skin health systems, reported recently that net sales for the first quarter ended March 31, 2012 rose 16% to a record $30.8 million from $26.5 million a year ago. The firm has been the subject of various M&A rumors during recent weeks.
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Source: Equity Briefing via Thomson Reuters ONE
Copyright (c) Thomson Reuters 2012. All rights reserved.
Topic: Press release summary
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