Orion Oyj (ORNAV), a Finnish drugmaker, climbed to its highest in almost four weeks after SEB AB said potential partnership deals could double cash flow this year.
Orion rose as much as 3.7 percent for its third day of gains and traded up 3.6 percent at 20.85 euros at 12:18 p.m. in Helsinki. It was the biggest advance today among stocks on the benchmark OMX Helsinki 25 index. The volume of Orion shares was about 50 percent of the three-month daily average.
“If a significant partnering agreement were to be signed this year for any of Orion’s mid-stage development products, cash flow could double compared with last year,” Lars Hevreng, an analyst at SEB in Stockholm, said in a note today. “The scope for upgrades to consensus forecasts are still significant.” He raised his recommendation to buy from hold and lifted the 12-month stock-price estimate to 24 euros from 22.50 euros.
Orion continues to be Europe’s least-loved drug stock among analysts amid concerns that expiring Parkinson’s disease drug patents will hurt profits through generic competition.
It has the lowest recommendation consensus in the Stoxx 600 Health Care Index, with 10 out of 13 analysts advising clients to sell, according to data compiled by Bloomberg. Its consensus price target has remained below the actual share price for the past 10 months.
“The effects of Orion’s willingness to renew its broad product portfolio seem to continue to be poorly recognized in consensus expectations,” Hevreng said. “The shares are trading without a premium to the market despite earnings stability.”
--Robert Valpuesta, Tom Lavell.
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