On Friday, Citi downgraded Calliditas Therapeutics (NASDAQ:CALT) stock from Buy to Neutral, while increasing the price target to $39 from the previous $30.
This move comes after the recent tender offer from Asahi Kasei, which proposed acquiring Calliditas at a significant premium. The Board of Directors at Calliditas has unanimously recommended that shareholders accept this offer.
The upgraded price target reflects a 91% premium over the volume-weighted average price (VWAP) of Calliditas' ADS for the 30 trading days leading up to May 24, 2024.
The tender offer has already seen a positive response, with approximately 44.65% of the company's shareholders indicating their intention to tender their shares.
Analysts believe that the acquisition price is a fair reflection of the value of Calliditas' drug Tarpeyo and its development pipeline, which lessens the likelihood of competing bids.
During the R&D day held today, Calliditas provided updates on its ongoing Phase 2 trial of setanaxib for head and neck cancer and additional insights into the use of Tarpeyo. Dr. Jonathan Barratt, a key figure in the field, offered further information on Tarpeyo's application and the competitive landscape for IgA Nephropathy (IgAN) treatments.
Despite the positive developments, Citi's downgrade indicates a neutral stance on the stock's potential for further price appreciation following the tender offer. The firm's analysis suggests that the proposed acquisition price by Asahi Kasei adequately captures the current value of Calliditas' offerings.
InvestingPro Insights
In light of the recent tender offer for Calliditas Therapeutics and the subsequent adjustment of analyst expectations, real-time data from InvestingPro provides additional context for investors considering the stock's current position. The company's impressive gross profit margin stands at nearly 95%, according to the last twelve months as of Q4 2023, underscoring the efficiency of its operations. However, the Price to Book ratio is notably high at 33.34, which may give investors pause considering the company's valuation relative to its tangible assets.
InvestingPro Tips highlight that Calliditas has experienced a significant return over the last week with a 71.6% increase, and the momentum has been strong over the last month and three months, with returns of 92.94% and 80.45%, respectively. These metrics indicate a robust short-term performance that could capture the attention of growth-oriented investors. Nonetheless, analysts on InvestingPro do not anticipate the company will be profitable this year, which is an important consideration for those looking at the long-term viability of the company.
For those interested in a deeper analysis, InvestingPro offers additional insights on Calliditas Therapeutics. There are 15 more InvestingPro Tips available, which can be accessed through the InvestingPro platform. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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