Analyst Downgrades: Innocoll Holdings PLC and Cempra Inc

Analysts downwardly revised their ratings and price targets on Innocoll Holdings PLC (INNL) and Cempra Inc (CEMP)

Dec 30, 2016 at 9:56 AM
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Analysts are weighing in on pharmaceutical stocks Innocoll Holdings PLC (NASDAQ:INNL) and Cempra Inc (NASDAQ:CEMP). Here's a quick roundup of today's bearish brokerage notes on INNL and CEMP.

  • INNL is plummeting out of the gate, down 57.6% to $0.75, after the company received a refuse to file letter from the U.S. Food and Drug Administration (FDA) regarding its post-surgical pain treatment, Xaracoll. In response, JMP Securities and Janney both downgraded the stock to the equivalent of "hold," with the latter also slashing its price target to $2 from $9, saying "We expect the need for additional capital to lead to a future financings that are far more dilutive than we previously estimated." It's been a brutal year for Innocoll Holdings PLC, which is now down 91% for 2016, and hit a record low of $0.70 earlier. But heading into today's session, the brokerage bunch was surprisingly optimistic, with all four firms covering INNL rating the stock a "strong buy." 

  • After dropping more than 57% in Thursday's session to hit a record low of $2.55, CEMP is up 3.8% at $2.70 this morning, though concerns over the company's pneumonia treatment are still looming large. Adding to Cempra Inc's woes are downgrades to "neutral" from "buy" at Ladenburg Thalmann and Roth Capital, as well as price-target cuts from Jefferies and SunTrust Robinson, to $2.50 and $2, respectively. Interestingly, Morgan Stanley weighed in by raising its rating on the stock to "equal weight" from "underweight," but the battered shares are nonetheless surrounded with pessimism. Specifically, nearly 14% of CEMP's total float is currently sold short, representing a week's worth of trading, based on the equity's average daily volume. Still, today's bounce isn't totally unexpected, considering CEMP is now deep in oversold territory, with a 14-day Relative Strength Index (RSI) of 19.
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