Pacira Pharmaceuticals Upgraded by Janney

Pacira Pharmaceuticals received an investment-rating upgrade Monday to neutral from sell from Janney Montgomery Scott as the firm noted a nearly 30% decline in the pharmaceutical company’s stock over the past month has brought it near the firm’s fair-value estimate of $36 each. Janney said its sell rating on the stock had been based on the belief it was “way ahead of fundamentals.” However, with the shares down 27% over the past month amid mixed results from phase 3 nerve block studies and disappointing Q2 results, the firm no longer sees significant downside. The shares closed Friday’s session at $35.80.

Still, the firm said it wasn’t raising the price target from $36 at this time. It said the valuation is based on estimates that include an acceleration in growth for Pacira’s Exparel–a local analgesic–that has yet to materialize. It noted PCRX’s own guidance has suggested growth should accelerate from 6%, where it has been for three consecutive quarters, to somewhere in the range 12% to 27% in the second half of 2017. “Thus, we believe upside to the stock is dependent on at least reaching the upper end of these levels,” Janney said.