Today was huge for biotech stock Emergent BioSolutions (NYSE:EBS) as its stock blasted up nearly 18% at the time of writing thanks to positive words from Benchmark. Benchmark believes there’s a lot of upside potential afoot for Emergent, potentially up to double current share prices.
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Word from Benchmark analyst Robert Wasserman was extremely kind to Emergent. Not only did Wasserman step up his ratings from Hold to Buy, but he also put out a share target of $22. At the time, that was roughly double what the share price was for Emergent shares. So what sparked that huge new potential upshot? One of the biggest reasons was that Emergent was poised to bring its Narcan nasal spray to over-the-counter use. The FDA recently approved such use, which will bring this life-saving medication to more potential users.
Wasserman noted that Emergent already had a strong sales channel for Narcan. Now, it would land more sales channels, which allows Emergent to put its years of expertise in selling Narcan in more places. Throw in some excellent name recognition, and Emergent likely has a new flagship product on its hands. Better yet, Emergent has another plan to drive up its cash flow and cut its expenses; the sale of its travel health business to Bavarian Nordic is still in the works. Once complete, the move should bring as much as $380 million to Emergent’s coffers.
Hedge funds, however, aren’t so certain. While hedge fund sentiment is currently Neutral, that didn’t stop them from selling off 19,100 shares of Emergent in the last quarter. However, this doesn’t speak to a loss of confidence; hedge funds bought around 32,000 shares in the previous quarter after selling off shares in the quarter before that.
