Cautious Outlook on Chimerix Amid Acquisition and Uncertainties in Drug Approval

Jefferies analyst Maury Raycroft downgraded the rating on Chimerix (CMRX – Research Report) to a Hold today, setting a price target of $8.50.

Maury Raycroft has given his Hold rating due to a combination of factors surrounding Chimerix’s current market position and future prospects. The acquisition of Chimerix by Jazz Pharmaceuticals for $8.55 per share reflects a significant premium over the previous closing price, yet the valuation multiple is lower than the biotech industry average. This suggests a cautious outlook on the stock’s growth potential.
Additionally, there are uncertainties related to the pending approval decision for dordaviprone, the ongoing Phase III trial, and market risks in the rare neuro-oncology setting. These factors contribute to a conservative stance, as the real-world durability and pricing of the drug remain unknown. Furthermore, the sentiment in the small to mid-cap biotech sector adds another layer of risk, justifying the Hold rating despite the potential for dordaviprone to become a standard of care with durable revenues into 2037.

Raycroft covers the Healthcare sector, focusing on stocks such as BioCryst, Sangamo Biosciences, and Chimerix. According to TipRanks, Raycroft has an average return of 4.6% and a 37.35% success rate on recommended stocks.

In another report released today, Wedbush also downgraded the stock to a Hold with a $8.55 price target.