Neos Therapeutics Inc buy tamam

NEOS could make an attractive buyout candidate to a company looking to expand its ADHD portfolio

NT-201 is the third drug the company has had approved for the ADHD space, which is roughly a $10 billion annual market in the United States.  Its first compound 'Adzenys' is seeing solid script growth and its second compound 'Cotempla' will hit the market soon after being approved in June.  NT-201 or Adzenys ER will roll out early in 2018.

This gives the company three wholly owned compounds it can market and distribute through the same sales force.  Obviously this should be extremely positive for revenue growth and margins.  Needham mentioned a possible "funding overhang" which I think is unwarranted given the company raised some $30 million near the end of June and ended the first half of 2017 with almost $80 million in cash and marketable securities on the books.  This represents about 40% of the company's approximate $200 million market cap.

Analyst commentary on NEOS is quite positive.  Over the past week,
RBC Capital, JMP Securities, BMO Capital and Canaccord Genuity reissued Buy ratings with price targets proffered on NEOS of $12 to $30 a share. Here is the color the five star ranked analyst (TipRanks) at JMP offered a few days ago with his $30 price target.

Update: "Given the multiple catalysts and removal of headwinds, shares of Neos "will eventually

reach $20" as a standalone company, Van Buren(Cowen´s analyst) wrote. This is justified

based on the company's portfolio of three products that will eventually

reach $300 million in sales with at least eight years in duration each.

Even based on just a 2x multiple on peak sales, the stock would be worth

$600 million, or over $20 per share

."

The stock on a longer term basis, remains deeply discounted to its true value in my opinion.

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