Jazz Pharma Still Loved At UBS, Firm Hikes Price Target To $210

In a report published Monday, UBS analyst Marc Goodman maintained a Buy rating on Jazz Pharmaceuticals plc - Ordinary Shares (NASDAQ: JAZZ), while raising the price target from $190 to $210.

"We still expect that Xyrem sales should grow to ~$900M by 2015 and remain protected from generics at least through 2019, and Erwinaze sales to grow to >$200M by 2015 driven by earlier diagnosis of pediatric patients," Goodman said.

The management's inorganic growth strategy is likely to be supported by a low tax rate, which the analyst believes would be in the mid-20s, as well as a robust balance sheet.

"[W]e assign minimal value to Prialt and the pipeline and any success should be upside to our estimates," Goodman stated, while adding, "We continue to believe in the management team's ability to execute and deliver double-digit EPS growth."

While the patent trial for Xyrem is expected later in the year, the analyst expects the 2019 use patent to be upheld at the least. The recent deals entered into by Jazz Pharmaceuticals in an attempt to diversify appear encouraging, given the underappreciated orphan drugs involved.

"We continue to like the name and believe we should see upside as investors get more comfortable with sustainability of Xyrem, growth of the rest of base business, and we see more deals from management," the UBS report stated.

The major milestones to look forward to in 2H15 include the FDA's decision on the Xyrem dispute resolution, as well as a potential start to the Xyrem trial with Roxane.